KARACHI, April 19: Sindh also wants an interim award for resource distribution between the federal and provincial governments and between the provinces before the next budget.
“The interim award can be on the basis of the points on which the previous National Finance Commission reached consensus,” a well placed source in Sindh government told Dawn on Saturday.
“We are taking a cue from Punjab, from where the demand for an interim award of resource distribution has been made,” the source said while disclosing that an official letter to Islamabad is being dispatched in a day or two to convey Sindh government’s position on the issue.
The last NFC of the military set-up headed by Finance Minister Shaukat Aziz had agreed on August 30 to retain population as the only basis for distribution of tax revenue among the provinces. However, it was agreed to consider working out other criteria for resource distribution in next NFC after five years.
A major change was decided in matter of allocation of resources between Islamabad and the provinces. In 1997 award the share of federal government in total divisible pool was 62.5 per cent which was brought down to 58 per cent in the agreed formula. Simultaneously, the share of the provinces was increased from 37.5per cent to 42 per cent.
The last NFC also decided to set up a subvention pool of Rs20 billion in every annual budget for next five years. Sindh’s share was reportedly worked out at Rs5.6 billion every year based on the difference between the expenditure and the income.
Provincial leadership in Lahore and Karachi want immediate financial relief in their respective budgets to offer as much facilities as could be possible. Sources in Sindh government do not rule out the possibility of NWFP and Balochistan also joining them to demand more resources for next fiscal year.
In the current fiscal year Sindh got an additional amount of Rs600 million because of the 1998 population ratio based on 1998 census figure which was slightly higher than the 1981 census.
One of the sour points left undecided on last NFC agenda was the distribution formula for the 2.5 per cent sales tax. This share in sales tax was offered to the provinces in 1999 by the Nawaz Sharif government after it abolished unilaterally through Inter Provincial Coordination Committee (IPCC) a purely administrative body, the zila tax and octroi. Karachi and particularly the Karachi Metropolitan Corporation was the main loser from this decision.
The federal government has and announced the extra collection of 2.5 per cent would be given to provinces. Sindh wants octroi collection be given due weightage in matter of distribution of this amount but Punjab insist on distribution on the basis of population. Although government has given no indication of how much amount has been collected from extra 2.5per cent. Initially it was indicated at Rs32 billion. But with increase in the overall collection, experts say that this amount should be about Rs42 billion.
In another development, the Sindh government has decided to nominate Abdul Karim Lodhi as its private non-statutory member on the National Finance Commission. A retired civil servant, Lodhi represented Sindh in the previous NFC.
