Provinces to get more revenue: New resource distribution formula
By Ihtasham ul Haque
ISLAMABAD, Jan 17: President Pervez Musharraf announced on Tuesday a new resource distribution formula, which offers increased revenue to the provinces.
In an address to the nation over radio and television, he said that since no consensus could be developed on a new National Finance Commission (NFC) award, he had decided to amend Article 160 of the Constitution to make the existing divisible pool more attractive for the federating units.
The president said he believed in inter-provincial harmony and for that reason he had decided to offer more money to the provinces through a new resource distribution formula.
He said that the provinces, which were currently receiving 42.7 per cent of resources under the existing NFC award, would now be offered 45.33 per cent resources.
He said that the four chief ministers had authorized him to work out a new formula, but at the last moment the NWFP chief minister came up with some conditions because of which the new NFC award could not be finalized.
However, he said, the provinces would now be offered an increased amount of subvention from the federal divisible pool.
These subventions were currently being offered only to the NWFP and Balochistan, which would now be extended to Sindh and Punjab as well.
He said the vertical distribution of resources was from federation to the provinces, while the horizontal distribution was the issue that rested with the provinces. The president said it had been decided to offer 50 per cent resources to the provinces in five-year period. Every year there will be an increase of one per cent to offer strategic gains to the provinces.
“We have decided to offer a total of Rs27.75 billion as part of the subventions to the provinces,” the president said.
The NWFP and Balochistan were earlier getting Rs8.7 billion as part of the subventions.
According to the new formula, Balochistan, which was previously receiving Rs4.8 billion a year, will now get Rs9.16 billion, while the NWFP, which was getting Rs3.9 billion, will now receive Rs9.71 billion. Punjab and Sindh, which were never offered any subvention, will now get Rs3.65 billion and Rs5.3 billion respectively.
“The provinces will receive additional Rs51 billion on account of subvention and increased divisible pool,” the president said.
The president made it clear that the new increased funding would be offered to the provinces on the basis of population and would be implemented from the next financial year.
About the situation in Balochistan, he denied that the army was conducting any operation in the province as was being alleged by some sardars whom he termed enemies of the Baloch people and the development of the country.
Frontier Corps troops, he said, were taking action against elements who were running farari (fugitive) camps in Balochistan. He said that 1,500-2,000 militiamen were being supported by a few sardars to carry out terrorist activities in the province.
However, he said his government would not tolerate lawlessness in Balochistan. He regretted that previous governments did not take action against the sardars who were supporting fugitives.
The president regretted assertions that the Baloch nation was facing any problem and said that some vested interests were working against the very existence of the country. “These few sardars are trying to impose their will on the people. They are obstructing development activities and are encouraging attacks on national installations in the province.”
He said he had gone to Kohlu to announce a development package for the area but rockets were fired on him, and the I.G. of the frontier crops was attacked and injured. “These few sardars are involved in attacks at various buildings in Karachi and Lahore as well,” he said.
“The army is only in Quetta and the Frontier Corps has been given the task to ensure law and order in the province.”
The president said that militiamen were being financially supported by foreign elements and the government had evidence to prove it. “We know that foreign hand is involved in Balochistan and is creating problems there,” the president said.
