ISLAMABAD, June 15: The federal government has decided to offer Rs290 billion more to provinces out of Rs600 billion federal divisible pool (FDP) in the first year (2005-06) of the sixth National Finance Commission (NFC) award to resolve the much delayed issue. This was said by Prime Minister’s Adviser on Finance Dr Salman Shah while talking to Dawn here on Wednesday.

“We have almost reached a consensus over the sixth NFC award, under which provinces will be offered 47 per cent of the FDP in 2005-06, with an increase of Rs3 billion every year so that ultimately provinces receive much demanded 50 per cent share in the last year of the award,” he said.

He added that now there was only Rs10 billion difference to meet the demand of provinces to have 50 per cent share.

However, he said, it would take three to four months to work out the modalities for preparing the new award.

“President Gen Pervez Musharraf is currently working out a common position to complete the process within three to four months to arrive at a solution about which broad understanding have just been reached,” he claimed.

“Provinces have accepted the advice of the president to go for strategic gains in the new award rather than fighting on tactical issues,” the adviser said.

He claimed the differences among the provinces had substantially reduced as the Sindh government had stopped insisting on the sixth NFC award on the basis of multiple indicators, including revenue collection.

About the distribution of resources among provinces, he said a good development had recently taken place, under which the NWFP and Balochistan had agreed not to get any thing on account of certain allocation to be made to Punjab and Sindh with respect to revenues generated under personal income tax.

The impact of the exercise would be the offering of around six to seven billion rupees to the two provinces, said Dr Shah.

Besides, he added, it had been agreed that Balochistan and the NWFP would be offered more funds by the centre for development activities, especially for opening new schools, hospitals and dispensaries.

The idea, the adviser said, was to have equitable distribution of resources. He said no major issue had been left that could cause problems in finalising the new ward within 2005- 06.

“In this way the blame on the federal government would also go that it had saved Rs80 to 90 billion by not finalising the new award and extending the old one.”