May 31, 2002	Friday	Rabi-ul-Awwal 18,1423

PESHAWAR, May 30: Provinces have opposed the National Reconstruction Bureau’s (NRB) proposals regarding formulation of Provincial Finance Commission (PFC) for devising formula to distribute provincial resources among the district governments and a new financial system required in line with the devolution of power plan introduced last August.

According to well-placed official sources, the NRB wants the four provinces to put the new financial mechanism in place from the start of the new financial year to fulfil the requirements viz-a-viz devolution of fiscal authority and smooth diversion of resources from provinces to the district governments.

However, Punjab and Balochistan, sources said, were still strongly opposing the NRB’s recommendations on the PFC.

The NWFP cabinet, sources added, had recently inked approval to the NRB-recommended financial system the province would introduce from July 1, in spite of the provincial government’s objections conveyed to the federal authorities concerned by the provincial minister for finance Farid Rehman.

The NWFP government has proposed to the NRB that the matters of deciding the structure of the PFC and the new financial system to fulfil requirements of the local government ordinance, 2001, be left to the up-coming provincial assembly, sources added.

“NRB wants that the new system should be in place from July 1, 2002 — well before the October polls,” said senior government functionaries.

Sources said that Balochistan had also rejected the NRB’s recommendations, envisaging diversion of major portion of the provincial governments’ cash flows from the Centre to the district governments.

NWFP, sources said, had also suggested to the NRB that the issue of devising formula for the distribution of provincial resources among the district governments should also be left for the future government, which would take on the job after the up- coming October polls.

The officials said the finance department, Punjab, had also made objections about the NRB’s plan.

An Islamabad-based senior government functionary told this scribe that a high-level meeting with President Pervez Musharraf in the chair would shortly be held in which governors of all the four provinces would also participate.

The NRB, said sources, had suggested that persons having technical experience about economic and financial affairs should form majority of the six-member PFC that should be set up in all the four provinces to devise financial mechanism needed in line with the spirits of the devolution of power plan.

Similarly, for distribution of provincial resources among the district governments, NRB has suggested that resources should be divided among the districts keeping in view their population, area, potential and requirements — instead of underlining the rules for distribution of resources on the pattern of the National Finance Commission, sources added.