KARACHI: NFC award: Sindh loses Rs300bn in five years
By Habib Khan Ghori
KARACHI, July 6: Over the past five years, the province of Sindh has been deprived of Rs300 billion because of the inordinate delay in the announcement of the National Finance Commission (NFC) award. The decision has been pending since 2002 when the validity of the 6th NFC award expired.
Sindh contributes revenue worth Rs500 billion to the federal government every year, which amounts to 68 per cent of the federal government’s budget. Despite this significant input, the province receives just Rs100 billion against its minimum requirement of Rs300 billion for the implementation of development schemes, a high-ranking revenue official told Dawn.
Given that this is an election year, the NFC award issue was raised in the general discussion during the Sindh Assembly’s 2007 budget session. The leaders of the joint opposition termed the presentation of the budget without the NFC award “illegal and unconstitutional”, and cited clauses four and five of Article 160 of the Constitution in support of their arguments. Talking to Dawn, the leader of the joint opposition in the Sindh Assembly, Nisar Ahmed Khuhro, points out that the 7th NFC award was due in February this year, but not only had the government failed to announce the award, it had also not convened an NFC meeting to address the issue.
‘Violations’ highlighted
Former chief minister and parliamentarian Syed Qaim Ali Shah says that the amended clause four of Article 160 of the Constitution empowered President General Pervez Musharraf to announce an award only on the basis of the commission’s recommendations. Therefore, he argues, the NFC award as announced by General Musharraf stood in violation of the Constitution since the commission had not made any recommendations. Members of the opposition are of the view that despite generating significant revenue, Sindh is being offered peanuts by the federal government. They allege that the major share of the divisible federal pool goes to the Punjab since the award takes population as its basic criterion.
“Over 65 per cent of Sindh’s population lives in the rural areas and is associated with farming, but the province is deprived of its due share of water,” they point out. “Meanwhile, the province contributes 68 per cent to the federal kitty but doesn’t get its share of the federal pool. This is why poverty is on the rise in Sindh.”
An estimated 50 per cent of the province’s population lives below the poverty line.
Treasury member and senior minister Syed Sardar Ahmed, who has presented the past five Sindh budgets, says that the 7th NFC was constituted in 2005 and its term would therefore expire in 2010. His view is that the 2007 budget was based on the interim award announced by General Musharraf after the four provinces failed to agree on a formula for the division of resources.
According to Mr Ahmed, the Punjab insists upon maintaining the current criterion where funds from the federal pool are distributed among the provinces on the basis of population figures, but the other provinces prefer other formulas. Sindh, he points out, has not backed down from its demand of using multiple criteria such as revenue generation, backwardness and poverty. Balochistan believes that resources should be divided on the basis of inverse population density while the NWFP emphasises that backwardness should constitute the key factor.
Mr Ahmed says that under Article 160 of the Constitution, the president is authorised to settle disputes over resource allocation. When the National Finance Commission failed to achieve consensus, provincial chief ministers asked the president in writing to announce the award.
The president announced the interim award in 2005 by exercising powers given by Article 160, clause six of the constitution which reads: “At any time before an order under clause (4) is made [which pertains to recommendations of the NFC] the president may, by order, make such amendments or modifications in the law relating to the distribution of revenues between the federal government and the provincial governments as he may deem necessary or expedient.”
