The federal government has reduced third installment of the financial equalisation grants – to be provided to the provincial and local governments – by half, due to mounting pressure on coffer.
“The federal government will provide them with only Rs 23 billion – after reducing Rs 23 billion – out of the total Rs 46 billion allocated earlier,” according to Finance Ministry. “The Council of Ministers meeting held on April 25 – on Tuesday – decided to reduce the grant by half and send remaining amount.”
Finance Ministry had written to the Office of the Financial Comptroller General – on April 27 – asking it to transfer only 50 per cent of the third installment of the financial equalisation grant to the local governments and provinces.
According to Sub-section (3) of Section 4 of the Financial Equalisation Grant Allocation Act-2079 BS, the final installment to be transferred in the financial year 2022-23 is Rs 9.94 billion to the provinces and Rs 13.20 billion to the local governments.
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