KARACHI, March 29: The National Finance Commission (NFC) will meet again in Islamabad some time in mid-April after its two-day session beginning from Tuesday in Quetta
, in view of lack of consensus between the federation and the provinces on a resource distribution formula.
"After the NFC meeting in Quetta, the prime minister will convene a meeting of chief ministers and political representatives of all the provinces to evolve a consensus on the formula for resources distribution," an authoritative source informed Dawn on Monday.
In case the meeting to be convened by the prime minister succeeds in bringing the chief ministers and political representatives of all the provinces round to some agreed formula, the NFC will hold a final meeting in Islamabad to put a seal of approval.
Incidentally, Prime Minister Mir Zafarullah Khan Jamali is a signatory to the 1997 NFC award as Balochistan's caretaker chief minister and finance minister that has added to the financial woes of that province.
Meanwhile, Sindh's representatives on NFC, finance minister Syed Sardar Ahmad and private non-statutory member Abdul Karim Lodhi, will attend the NFC meeting in Quetta on Tuesday and Wednesday with a determination that they would not put their signatures "if the formula does not provide for multiple criteria."
They want the principle of revenue generation capacity to be given due weightage in the resource distribution formula. The provincial government is under tremendous pressure of all the political parties to secure a share in the federal divisible pool that it has been asking since 1974 when the first NFC award was declared, sources close to the two NFC members from Sindh said.
Any shift in the stand for a share in the federal taxes could put the Sindh coalition under pressure from its own constituent parties and the public at large.
Sindh has a legitimate claim on all the taxes generated within the province no matter if the imported items are being consumed in Punjab or other provinces or the companies are located at Lahore.
Earlier, it was stated that the NFC was holding its final two-day meeting in Quetta to hammer out a consensus formula for the distribution of taxation income among the federation and the provinces.
Now that any consensus on the principles of revenue distribution formula is hardly in sight, the Quetta session is expected to deliberate the offer made by the federation to part with 46 or 47 per cent of the taxation divisible pool to the provinces.
Incidentally all the provinces have made a unanimous demand on Islamabad to give at least 50 per cent of the divisible pool of taxes to them. They also want the federation to retain only 2 per cent of the total divisible pool as collection charges and not 5 per cent as was being done for the last 30 years.
Sindh wants 2.5 per cent of the sales tax collection estimated at around Rs36.4 billion to be kept outside the divisible pool and be given to the provinces on the basis of their actual sales tax collection.
The provinces want the federation to shed off extra bulge that it carries in the form of ministries and departments that are provinces' responsibilities under the Constitution.
"Why should the federation have big agriculture, education, health and interior ministries when all these subjects are provinces' concern," a source said. The federation has about one million civilian employees on its payroll with a salary burden of about Rs50 billion.
"This is a small step towards reduction in the federation's financial burden," he argued. The NWFP has already declared that it would not accept the NFC award if it does not give share in the hydel profits.
Balochistan wants a share from the natural gas production and marketing. Punjab is the only province that wants status quo which means distribution of resources on the basis of population.
