14 March 2004	Sunday	22 Muharram 1425

PESHAWAR, March 13: Prospects of finalizing the new national finance commission award by March 31 deadline are fast becoming thinner, sources told Dawn here on Saturday.

"The NFC does not appear to be in a position to finalize the new award within the cut off date because it has yet to develop consensus on several important but contentious issues," said a source.

The commission had last met at Peshawar on Feb 21 and since then there had not taken place any follow up activity on the part of the federal and provincial governments to make progress to achieve the goal of finalizing the new award within the specified period, sources said.

The sources said that the commission had neither taken decision on the size of the federal divisible pool, provinces' share from it and the most controversial issue of determining determinants for distributing resources between the provinces.

The Peshawar meeting, added the sources, had decided that next session of the commission would be held at Quetta before which finance ministers of the four provinces would hold an informal meeting to decide the multiple indicator issue.

"Though the ministers' meeting was scheduled to be held during the current week, it was postponed due to certain reasons," said another source.

The chances of finalizing the new award within the cut off date were fading away because neither the date for the commission's next meeting at Quetta had been fixed nor there was any signal from the federal authorities concerned indicating its plan to meet the March 31 deadline.

The most contentious issue pending before the NFC is developing consensus among provinces on the question of what should be determinants on the basis of which resources should be distributed among the federating units.

Punjab is of the opinion of continuing with the existing single indicator-based resource distribution formula for distributing resources between the federating units, the smaller provinces want that poverty, revenue effort by a province and size of the province should also be considered as determinants to distribute resources between provinces.

The Peshawar meeting had ended without developing consensus on the multiple indicator issue and provinces' representatives had been given time to discuss the proposals discussed at the Feb 21 meeting with their respective governments.

"There is no let up in the situation as provinces are sticking to their stated position on the indicators issue," said the sources.

This situation, added the sources, might prompt the federal government to 'impose' its plan on the federating units to materialize its endeavours to finalize the new award by March 31.

"Preparation of the next financial year's budget would get under way in mid April and at that time no one would be in a position to negotiate the new NFC award," said the source.