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| 06 June 2004 | Sunday | 17 Rabi-us-Saani 1425 |
Provinces to get Rs28bn more: Federal divisible pool
ISLAMABAD, June 5: Provinces will get Rs202 billion in 2004-05 from the federal divisible pool under the existing NFC award against Rs174 billion they had received during the current fiscal year
, official sources said.
"We will be offering an additional Rs28 billion to the provinces in the next budget under the old resource distribution formula," said a senior official in the finance ministry.
Talking to Dawn on Saturday, the official said the increase would include 2.5 per cent General Sales Tax plus subventions and grants. At present, he added, there was a Rs470 billion federal divisible pool, of which the provinces had been offered Rs174 billion in the 2003-04 budget.
The official said there were other funds called 'straight transfers' that went to the provinces, including the excise duty on natural gas and crude oil as well as surcharge on gas. He expected that the federal government, that had provided Rs21.6 billion under this head to the provinces in 2003-04, would increase the amount in the next budget. He pointed out that Rs8.7 billion subventions were given to two provinces - Rs3.9 billion to the NWFP and Rs4.8 billion to Balochistan.
Balochistan, the official said, could not return its Rs5 billion overdraft to the State Bank as it did not get gas royalty from the petroleum ministry. The petroleum ministry had been directed to clear its dues payable to Balochistan by June 30, he added.
Asked as to why there had been no consensus on the 6th NFC award, he said Sindh was maintaining that it should be adequately compensated for collecting huge taxes. But this argument, he added, was not acceptable to other provinces who said they were paying port charges to Sindh and were therefore unwilling to accept that Sindh was making sole efforts in revenue collection.
In reply to another question, the official said that he had met all the provincial finance ministers on Saturday and apprised them of the funding arrangements being made by the Centre for financing the new budget. The total size of the budget was likely to be around Rs1 trillion.
He said though there was no agreement on the new NFC formula, the four finance ministers had agreed to continue discussion on the issue after the budget.
Another official source blamed Sindh for the stalemate on the NFC issue. He said the Sindh government had refused to accept a formula under which the province could have got an additional Rs7 billion, including the funds coming from the Rs20 billion subvention and grants.
He said the NWFP and Balochistan had already been getting funds from the subvention and grants and now Sindh could also have been provided such funds had it not stuck to its 4pc revenue generation consideration.
The official said that President Gen Pervez Musharraf had briefly met the authorises of all the four provinces and told them that he would not intervene unless they removed their internal differences over the new resource distribution formula.
He said that earlier it was due to the intervention of the president that the provinces' share had been increased from 37.4pc to 47.4pc in the proposed 6th NFC award.
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