June 26, 2003	Thursday	Rabi-us-Sani 25,1424

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KARACHI, June 25: The re-constituted National Finance Commission will have to tackle anew the issue of sharing of gas development surcharge between the provinces as Balochistan has come out with an altogether new suggestion on the matter.

In the post-budget press conference at Quetta last week, Balochistan Finance Minister Syed Ehsan Shah said that he wants the province to be treated at par with Sindh in matter of allocation of share on proceeds of development surcharge on gas.

Balochistan’s finance secretary has served for long as the deputy secretary in the federal finance ministry in Islamabad and is well versed with manipulations and tricks that federal government plays on both the provinces.

Gas production in Balochistan is the end result of federal government’s investment made decades ago. With the course of time, the gas production in Balochistan has dwindled and hence its share in the national gas distribution system has gone down.

On the contrary, gas production in Sindh is on rise mainly because of the private sector’s investment.

“The distribution of development surcharge on gas and oil among the provinces is a very complex issue,” a well-placed source in Karachi said, adding that the procedure has been made complex deliberately. Sindh and Balochistan depend entirely on Sui Southern Gas Company for getting information on gas supply and distribution and the revenue it generates.

“But Sindh welcomes the idea of a collective monitoring system on gas production and distribution,” sources said. Balochistan enjoys support of Prime Minister Zafarullah Khan Jamali. Jamali had represented Balochistan on the NFC as a private statutory member in the NFC constituted in November 1990. In 1996, Jamali was Balochistan’s caretaker Chief Minister and finance minister and was member of the NFC constituted by Farooq Leghari.

In fact, Jamali had endorsed the final NFC report in February 1997, the day elections were being held in the country, after getting a firm assurance that his province will get a generous subvention grant for next five years along with the NWFP. Sindh was represented by Kunwar Idrees, who was a nominated Finance Minister, and Nabi Bux Bhurgari, a private statutory member on the NFC. The 1997 NFC award has literally pauperised Sindh.

Now for the second consecutive year, Sindh is depending entirely on the 1997 NFC award for transfer of resources. The 2003-04 federal budget documents indicate Rs4.8 billion subvention for Balochistan and Rs3.89 billion for the NWFP. There is a block subvention allocation of Rs3.94 billion with no indication where this amount would go.

There are reasons to believe that this budgetary block allocation of Rs3.94 billion would be given to Balochistan where federal government has lot of stakes at present.

All the four provinces have now nominated their respective private statutory members on the National Finance Commission (NFC) and are now waiting for notification from Islamabad for holding of the meeting.

Punjab, NWFP and Sindh have retained their nominees of the NFC constituted on July 20, 2000 on orders of former President Rafiq Tarrar. Balochistan is the only province to have nominated a new member Dr Gulfaraz. Punjab will continue to be represented by Saeed Qureshi a retired secretary-general of the finance ministry. The NWFP has nominated Dr Zubair, a technocrat and cabinet minister in Meraj Khalid’s caretaker government.

Abdul Karim Lodhi will represent Sindh.

Officials say that there is no need to reconstitute the NFC. The president will simply endorse the change in composition of the private statutory members.

The private statutory members are on the NFC by virtue of their nominations from the provincial governments.

Other members are by virtue of their offices. They are federal finance minister who heads the NFC. The finance ministers of all the four provinces are also on the NFC by virtue of their offices. Change of face of finance ministers in any place — Islamabad or provinces — will not make any difference and would not warrant any fresh notification. There may be one or two experts.

In the last NFC, sixth in sequence after 1973 constitution, the secretary-general of the finance ministry and the secretary finance were inducted as experts.

Total membership of the NFC was 11 which is expected to remain unchanged.

The present NFC could hold only five working sessions in late 2002 when elections were held and governments were formed.

With more than six months in office, the present government has also not been able to finalise the re-composition of NFC which is causing concern and anxiety in the provinces.