April 8, 2003	Tuesday	Safar 5, 1424

KARACHI, April 7: Mainly because of delay in appointment of a federal finance minister in Islamabad, the formation of the National Finance Commission (NFC) is being put off. All the four provinces are reported to have decided to retain their private statutory members on the NFC nominated on the last Commission.

Under the article 160 of 1973 Constitution, the NFC is headed by finance minister. It has finance ministers from all the four provinces plus one nominated statutory member from each of the four provinces. There may be one, two or more members representing the federal bureaucracy on the NFC. The last 11-member NFC had a retired secretary general and federal finance secretary on it.

Well-placed sources in the NFC directorate in Islamabad informed this correspondent by telephone on Monday that the formation of NFC is now being delayed only because of the absence of a federal finance minister.

Shaukat Aziz, who now holds the office of Adviser to the Prime Minister on Finance and Economic Affairs, cannot head the NFC. His appointment as the finance minister is being delayed because of the political considerations as reports suggest that there is a growing demand to accommodate more persons from the PPP Patriots, Muttahida Majlis-e-Amal and a few independents in the federal cabinet.

Way back in July 1990, the NFC was headed by prime minister Benazir Bhutto who then held the portfolio of finance. V.A. Jafferey was then adviser to the prime minister on finance. This NFC could not complete even a month as the PPP government was dismissed by former president Ghulam Ishaq Khan in first week of August 1990.

“The NFC is headed by a finance minister and not by an adviser to the prime minister on finance,” the source in Islamabad told Dawn in response. He replied in affirmative to a query if nominations of the private statutory members have been received from all the four provinces. He said NWFP and Punjab had given their consent in writing to retain their private statutory members who were on the previous NFC.

Sindh and Balochistan are reported to have conveyed their consent that they too would want to retain their previous members. More than one well-placed sources in the Sindh finance department confirmed on Monday that Abdul Karim Lodhi, a no-nonsense and straight talking retired bureaucrat, will continue to represent this province in the next NFC.

In all likelihood, the next NFC would have by and large same terms of reference as of the last NFC. A new notification for the NFC would be needed to accommodate new federal finance secretary plus one or two experts if necessary.

What is certain is that the next year’s budget of the provinces would be based on the resources to be made available to them on the basis of 1997 NFC award, which ceases to exist as a constitutional instrument since July 2002.

The Sindh government is organizing a seminar next week in Karachi on resources distribution arrangements between the federation and the provinces. Representatives from other provinces are also expected to be invited to ventilate their views on this sensitive issue.

Sindh has already rejected the idea of resources distribution on the basis of 1997 NFC award. It rejects population as the only basis for allocation of resources and jobs.

Population is accepted as the only basis for allowing the provinces to give shares to the federation from their collections.

That is to say that Sindh should be allowed to collect all the taxes and non-taxes revenue and part away with 23.34 per cent of collection to Islamabad and retain the rest with it.