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 Islamabads all discretionary and non-discretionary expenditures as well as resources, and its possible impact on federal governments 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.
According to him, the provinces have demanded 60-40 per cent ratio between Provinces and the Federation respectively. Finance Minister further said that all the NFC members indicated constructive approach to all the issues which came under discussion.
To a question if there was any deadlock about vertical distribution formula, he said: The debate on various options is going on, while we should not see the debate on issue as failure of NFC.
However, the issue of resource distribution among provinces and, Federation-provinces has not been finalized since 19 years due to its sensitivity.
Meanwhile, Sindh Chief Minister Syed Qaim Ali Shah said that the provinces have expressed their views over vertical distribution of resource between the Federation and provinces, while this is now a time for federal government to show flexibility on the issue.
Kaisar Bengali, non-official member of Sindh in NFC said that the NFC meeting held in cordial atmosphere discussed various options about brining change in the existing vertical distribution formula of resource with their impact on Federal and provinces finances.
Mr Bengali pointed out that federal government through its finance minister Shaukat Tarin maintained that provinces share in FDP would be increased more than federal governments share.
Sindhs NFC member further said that the increase in the provinces share would be made in such a way that the budgetary framework and finances of Islamabad were not be distorted.
NWFP Finance Minister said federal government has showed willingness to cut its share in Federal Divisible Pool, hoping that decision would be finalized in todays meeting.
Punjab Finance Minister Tanvir Ashraf Kaira said: Punjab is ready to talk on criteria for resource distribution among provinces on basis other than population.
Meanwhile, four chief ministers of the provinces were in the city to discuss a number of options of resource distribution among the provinces to reach on consensus.