KARACHI, Oct 11: Bureaucrats are set to torpedo the deliberations of elected representatives of the federal and provincial governments on National Finance Commission (NFC) from the word go as the notification issued on August 20 last has caused utter confusion and raised questions in federal and provincial capitals.

The confusion is about the tenure and term of the NFC set up under a recent notification whether it will expire by 2010 or continue for next five years till 2013. The August 20 notification simply modifies the previous government’s notification issued on July 21, 2005 for an NFC that never held any meeting.

The current notification gives names of three private members of Sindh, Balochistan and NWFP in place of members of the 2005 NFC. The only addition is name of Ms Hina Rabbani Khar, who is adviser to the prime minister on Economic Affairs.

This issue was discussed on September 22 last in the first meeting of an 8-member committee formed by the Sindh government to help two official negotiators on the NFC in presenting the case of their provinces convincingly in the deliberations likely to start late this month or early next month.

The meeting was chaired by a Sindh minister Agha Siraj Durrani that sought a clarification from the federal government on term and tenure of the NFC as notification on August 20 gives an impression of it being a modification of previous notice and hence is for next two years.

There are also serious objections on the terms of reference of the NFC, which remains the same as was of 2005 notification. “Apparently, no views from the federal cabinet members were obtained for issuing this notification,’’ a member of Sindh committee on NFC remarked.

Any item on agenda asking for deliberations on gas development surcharge, royalty on oil and gas and other issues are outside the NFC and hence cannot be a part of terms of reference. There is considerable anger in Karachi on the way bureaucrats are tackling a sensitive issue of distribution of national resources.

A growing consensus among politicians and professionals in Sindh is that bureaucrats have no capacity to tackle sensitive federation-provinces and inter-provincial issues and eventually they (politicians) would have to take up the responsibility of moving forward.

Bureaucrats from Lahore are dropping hints of their provincial government sticking to single criterion — population — as the only basis for distribution of national resources. One argument in favour of this logic is that it was late Z.A. Bhutto, founder of PPP in whose term as the prime minister the NFC gave its award in 1975 and declared population as the only criterion for distribution of national resources.

“Each NFC award is for five years and is to be reviewed and changed if necessary,’’ said Taj Haider, a former PPP Senator, who was on NFC in 1994 and 1995. Way back in seventies it was large-heartedness of the people of Sindh and the towering personality of late Bhutto that population was accepted as single resources distribution criterion and federalisation of sales tax. After the 1971 tragedy small provinces showed spirit of accommodation.

“The size of the provincial pool should commensurate with the quantum of provincial autonomy enabling the provinces to meet additional expenditures on new subjects transferred to provinces,’’ he said while pointing out that almost all parties, including PPP in the parliament, are committed to scrap concurrent list of the constitution.

Taj Haider’s proposal is to give a maximum of 70 per cent weight to population in distribution of resources, while other factors like tax generation, backwardness and size of the province should also be given consideration.

But disappointed and extremely frustrated with the outcome of deliberations of last seven or eight national finance commissions in Pakistan since 1974 when population was set as the only criterion for distribution of national resources among the provinces and sales tax was totally federalised, professionals in Sindh are seriously considering a resource distribution model on Indian pattern.

Two well-known professionals, who are members of the Sindh provincial committee on NFC have proposed in the very first meeting, to carryout a hypothetical study to see what would be situation in Pakistan if the Indian NFC formula is adopted. One member claimed to have some data with him and some type of model can be developed.

In India, the resources are being distributed in accordance with the 12th NFC since 2005-06 and will continue till 2009-10. Population has been given a 25 per cent weight in this arrangement as against only 10 per cent in the 11th NFC award. Income distribution relative with poverty gets the highest share of 50 per cent, while geographic area is given 10 per cent and tax efforts 7.5 per cent.

Syed Sardar Ahmad, a former finance minister, who is also a member of provincial NFC committee, is on the record to have expressed his strong disapproval of the 1973 Constitution method of NFC and has advocated the constitutional procedure of India.

In last 38 years, only two NFCs have given consensus award. In 1975, the first NFC because of the towering personality of late Bhutto and second in 1991 when NFC of the Nawaz Sharif government provided provinces an opportunity to have a share in natural resources.

All along since 1977, the bureaucrats ran the show and shoot down any legitimate demand of small provinces, which has caused bitterness and alienation among Sindh, NWFP and Balochistan.

In India, an NFC comprising scholars, retired bureaucrats of integrity, judges and economists, is constituted for five years. The commission visits every state of India and talk to all stake holders — politicians of the government and opposition, trade unions, businessmen, academics — and gives an award.