January 25, 2003	Saturday	Ziqa’ad 21, 1423

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LAHORE, Jan 24: The sixth National Finance Commission (NFC) award is unlikely to be announced before the end of April, senior Punjab finance department officials say.

“There are many issues involved. First, the commission needs to be reconstituted since new governments in Islamabad and provinces have been installed. Secondly, we still do not have a federal finance minister to preside the NFC meeting. Though former finance minister Shaukat Aziz has been retained as adviser to the premier on finance, he will not be made a minister before his election to the Senate in the last week of February,” the officials told Dawn on Friday.

“The NFC would be reconstituted and the new provincial finance ministers accommodated (in place of their predecessors) after the elevation of Mr Aziz as federal minister,” they added.

The absence of the federal finance minister and reconstitution of the commission are, however, not the only issues that are expected to delay the announcement of the sixth award. “There are other issues which the (new) commission will have to resolve when it meets for finalizing the award,” the officials claim.

The two main issues that the commission was faced with when it postponed its Oct 25 meeting included distribution of 2.5 per cent GST between the provinces and determination of royalty to be paid by Wapda to the NWFP for power generation from Tarbela Dam.

The Sindh is claimed to be demanding distribution of 2.5 per cent GST on the basis of collection of the value added tax, other provinces do not agree with it.

Wapda is also said to be still opposed to the NWFP demand for enhancement of the royalty of Rs6 billion it is currently paying to the province.

“These thorny matters cannot be expected to be settled in just one session even if the commission meets in early March after its reconstitution. We’ll have to have at least two or three sessions for finalizing the award that is expected to delay its announcement till the end of April or beginning of May,” say the officials. But they were confident that the award would not be delayed beyond that because the provinces have to finalize their budgets for the next fiscal by the end of May.

The award was due before June 2002 for distribution of revenue resources between the federation and the provinces and also among the provinces under it in the current financial year.

It was being widely hoped that the award would be finalized in the Oct 25 meeting that was postponed on the pretext that the military regime wanted the new democratic government to work out a consensus on the unresolved matters before announcing it.

According to reports, the new award would raise the provincial share from the divisible pool to 44.6 per cent from existing 37.5 per cent which would be distributed among the federating units on the basis of their respective population.

The provincial share is reported to have been increased by the inclusion of subvention grant of Rs20 billion for Sindh, NWFP and Balochistan and 2.5 per cent GST.