ISLAMABAD, May 27: Sindh announced on Friday that it would stay away from any discussion on the National Finance Commission (NFC) award unless its proposal for including revenue generation in the formula of horizontal distribution of divisible pool was accepted. The Sindh also rejected a new formula presented by three other provinces — Punjab, Balochistan and the NWFP — that suggested an increase in the share of the provinces without any reference to any criteria, including population.

Sindh Finance Minister Syed Sardar Ahmad refused to attend another meeting proposed by Balochistan Finance Minister Syed Ehsan Shah to discuss the new formula. “The development on the NFC is zero,” Mr Ahmad told journalists, adding that he would announce the Sindh budget on June 10 on the basis of existing NFC award. The negotiations between Balochistan and Sindh on the question of gas development surcharge also faced stalemate as Balochistan accused Sindh of backing out of ‘its original offer to increase Balochistan’s share by Rs1.5 billion’.

Meanwhile, highly placed sources told this correspondent that the federal government had informed the provincial governments that their share under the existing award would be around Rs235 billion and they should prepare their budgets accordingly.

Both the finance ministers of Sindh and Balochistan separately said that there was no chance of finalizing the new award before next year’s federal budget scheduled for June 6 and they were preparing their budgets on the basis of resources available under the existing award.

Sources said that accordingly, the provincial budgets of Punjab and Sindh had been scheduled for June 8 and 10, respectively. “I have rejected the new formula presented by the three finance ministers on Thursday night and published by Dawn because the proposed increase in provincial shares is not based on any principle”, the Sindh finance minister said. He added that Sindh would not change its stance and the new formula was not acceptable to it.

Mr Ahmed said that he was asked by the Balochistan finance minister to stay in Islamabad after the National Economic Council session ended to participate in another meeting on the NFC. “I replied Mr Shah that I would neither stay here nor discuss the NFC award any more,” he said.

Mr Ahmad said that Sindh was also asked to accept the new proposal on ad hoc basis for one year if not for a five-year term but that too was not acceptable to Sindh.

“There should be some principle. Only when a principle is agreed upon, further discussion could take place,” he said. He said that he had written to the finance ministers on May 19 to accept the multi-factor formula encompassing population, backwardness and revenue and then hold discussions on the percentages.

He lamented that Punjab Finance Minister Husnain Bahadur Dareshek had termed his proposal unconstitutional and added that if Sindh’s proposal was unconstitutional, so was the present formula.

Elaborating, he said that under the existing formula, 62.5 per cent of the provinces’ share (2.5 per cent of general sales tax amount) was based on revenue collection and the remaining 37.5 per cent on population.

The Balochistan finance minister said that he was going to ask the federal government to intervene in the issue of the GDS ‘because Sindh had even backed out of its original offer’.

He said that he had requested his counterpart in Sindh to hold a meeting on the NFC award with other provinces but he (Mr Ahmed) had declined.