Provinces to get over 50pc share

KARACHI – The Federal government has shown willingness to increase the provinces’ share to over 50 per cent under new NFC award in Federal Divisible Pool, however the final formula would be unveiled in the second day meeting of the National Finance Commission, to be continued today (Thursday) in Karachi.
Federal Finance Minister Shaukat Tarin unveiled this during media briefing after the day-long deliberations of 5th NFC meeting for seventh NFC award held at local hotel in the city on Wednesday.
The NFC will also meet today (Thursday) to discuss horizontal distribution of resources among the province. Sindh Chief Minister Syed Qaim Ali, also Finance Minister of the province besides the three provinces’ finance ministers - Tanvir Ashraf Kaira of Punjab, Muhammad Humayun Khan of NWFP and Muhammad Asim Kurd of Balochistan, four ex-officio NFC members, federal and provincial secretaries also attended the meeting.
Mr Tarin pointed out that NFC has discussed various options of vertical distribution of resources between the federation and the provinces, stating that the federal government and provinces have shown flexibility on the issue.
He said at least 4 to 5 options of Federal-Provinces’ share were discussed with Islamabad’s all discretionary and non-discretionary expenditures as well as resources, and its possible impact on federal government’s finances.
The federal representatives also discussed the expenditures being incurred on the military operation and being borne by federal government against terrorism in NWFP.
Mr Tarin, also NFC chairman claimed that the meeting achieved a big development about vertical distribution of resources between federation and provinces, adding that the discussed options would be shared by all the Provincial Finance Ministers with their Chief Ministers, while the share of the Federation and provinces in Federal Divisible Pool (FDP) would be finalised today (Thursday).
The Federal Finance Minister did not disclose the exact cut in terms of percentage of federal share in FDP, but made it clear that provinces share will be over 50 per cent in FDP.
Replying to questions, Mr Tarin said the federal government and provinces have decided to follow new trend under which the direction of resources would be towards the province not the centre, while this shift of direction would be visible in new NFC award.
Finance Minster said: “We want to empower the provinces through shift of resource from the federation to provinces and this is aimed to spend money on the development for people”. He maintained that the Federation depends on provinces as provinces are the four pillars of federation. To another question, Mr Tarin maintained that federal government was committed to empower the provinces as, in absolute and percentage terms, the share of province would be increased in Federal Divisible Pool.