KARACHI, July 9: Sindh Chief Minister Syed Qaim Ali Shah and senior minister Pir Mazharul Haq are expected to represent their province in the next National Finance Commission whenever it is constituted. The former holds the portfolios of finance and planning and development and will represent Sindh by virtue of his office.

Well-placed and knowledgeable sources in the Sindh government say that Pir Mazhar has been picked up as a private and non-statutory member to represent his province on the NFC.

With the PPP in centre and in all the four provinces and its close alliance with PML-N in Punjab and ANP in the NWFP it is expected that a consensus NFC formula may emerge in the next meeting.

“Pir Mazhar represented Sindh in the informal meeting of finance ministers of three other provinces on June 4 in Lahore,” an authoritative source in the government confided.

The informal meeting of four ministers—one each from the four provinces—unanimously demanded Islamabad to stop collecting sales tax on services immediately as under the constitution it was a provincial subject. But the 2008-09 budget shows that federal government is still collecting sales tax on services.

Balochistan’s nominee for private and non-statutory member on the NFC is Mr Gulfaraz, who does not belong to that province but lives permanently in Islamabad. He has served as federal secretary of petroleum and natural resources. By virtue of this position, Mr Gulfaraz is expected to plead for an improvement in Balochistan’s share in gas development surcharge and in other revenues related to gas production and distribution.

Senior bureaucrats in Balochistan government are convinced that Mr Gulfaraz’s nomination as a non- statutory and private member to represent their province on NFC will not create any constitutional problem.

“However, there may be some political issues,’’ one of the well-placed sources in Quetta indicated, who feared that the nationalist political leadership might have serious reservations on this nomination.

Under article 160 of the constitution, President of Pakistan constitutes the NFC after a period of every five years. The federal

finance minister is the chairman of the commission. Other members to represent federation on NFC are recommended by the finance ministry and given approval by the president. The chief ministers of four provinces are members of the NFC by virtue of their office.

The government headed by the chief minister proposes a panel to the governor from which one member’s name is approved and forwarded to the federal government.

The president sets the agenda for discussion and debate of the NFC during which the commission proposes a formula for vertical distribution of resources, that is, distribution of resources between the federation and the provinces.

The NFC has to give consensus formula for the criteria on which funds given to the units are to be allocated to each of the four provinces.

The 1997 NFC award was given by a caretaker government in February on the day when elections were being held. It caused a lot of heart burning and frustrations among the three provinces—Balochistan, the NWFP and Sindh.

The NFC formed in the year 2002 with Shaukat Aziz as chairman failed to reach any consensus. Therefore, the government continued to distribute resources under 1997 NFC award till the year 2005, when President Musharraf intervened and gave his formula.

His formula too recognises population as the only basis of resources distribution among the provinces, which is a source of permanent irritation to Sindh, Balochistan and the NWFP. The Musharraf formula retains sales tax completely federalised, which is now being questioned in Sindh.