October 20, 2002	Sunday	Sha'aban 13, 1423

KARACHI, Oct 19: The Sindh government will get about Rs600 million more than budgeted share of the federal divisible pool in the current fiscal year following the decision to refix provincial ratios of resources distribution on the basis of population census in 1998.

Officials in Sindh expect to receive arrears of Rs150 million for three months (July-September) along with October instalment of share on the last day of this month. The federal government normally releases shares to the provinces from the divisible pool on the last day of every month.

President General Pervez Musharraf promulgated an order on Thursday to change the share ratios of the provinces. For last more than 15 years share ratios of the provinces in the federal divisible pool was fixed on the basis of 1981 population.

Under this order, Sindh’s share ratio in divisible pool of taxes has been increased by 0.4 per cent to 23.71 from 23.28 per cent. The NWFP is the other province to benefit from this order where new share ratio has been fixed at 13.82. Share ratios of Punjab has been brought down to 57.36 and that of Balochistan to 5.11 per cent.

It means that Sindh’s share from the federal divisible pool will increase to more than Rs56.5 billion in the current fiscal year from original estimate of Rs55.9 billion. Revenue collection has shown encouraging trend in the first quarter of this fiscal indicating some signs of economic revival.

Reports suggest that exports have increased by about 14 per cent, imports by about 11 per cent, remittances are touching one billion dollars figure, inflow of direct foreign investment has picked up and therefore also the revenue.

A rise in federal revenue indicates a similar increase in provincial taxes and non taxes. Overall it should lead to a healthy impact on Sindh’s budget in the current fiscal year.

An increase of Rs 600 million more money from Islamabad will help to offset more than Rs3 billion deficit in the overall budget and to finance an ambitious Rs10 billion development outlay.

In another development, the National Finance Commission (NFC) has issued notice and agenda for the next meeting on October 25 at Lahore. The finance ministers of the federal and provincial governments, four statutory members and the supporting team of bureaucrats will attend the meeting.

In last two meetings, the NFC has claimed to have reached consensus on almost all the issues related to resources distribution with the exception of working out a distribution mechanism for Rs32 billion fund representing 2.5 per cent of GST among the four provinces, settlement between NWFP and Wapda on hydel profits distribution and Balochistan’s issue of getting full information from Petroleum Ministry on oil and gas development.

The task of the NFC has now become somewhat difficult after the holding of general elections. Many elected legislators oppose the promulgation of an NFC award by non-elected government at a time when assemblies are about to meet and elected governments will be installed in Islamabad and all the four provinces. A number of leaders from major political parties have already expressed serious reservations on maintaining population as the only criterion of resources distribution.

The last crucial meeting of the NFC was earlier scheduled to be held in first week of October to finalize the recommendations on resources distribution arrangement between the federation and the provinces and among the provinces. It was expected that President Musharraf will promulgate new NFC award for distribution of resources for next five years before the elections. But now that a meeting has been called, there is a general feeling that provinces will not respond positively.