ISLAMABAD, March 30: The federal government has shown willingness to offer increased resources to the provinces under the 6th National Finance Commission (NFC) Award, including to consider lowering their debts.

Official sources told Dawn here on Saturday that all the four provincial working groups on the NFC had been asked by Finance Minister Shaukat Aziz to complete their recommendations as early as possible so that the next meeting of the commission could be convened to consider and finalize the new resource distribution formula.

All the four groups are currently meeting in Islamabad to finalize their recommendations.

The first working group on the 6th NFC Award is headed by the Punjab’s finance minister and its mandate is to determine benchmarks in respect of expenditure; to suggest measures to control expenditure and generate resources; and to project future requirements of the federal and provincial governments.

The second group is working under the chairmanship of the finance minister of the NWFP and has been asked to study the composition of the current and development expenditure of the provinces; to suggest measures in the light of the devolution plan for shifting more resources; and to study financial impact on the provinces of the devolution of power plan and district governments.

The third working group is headed by the Sindh’s finance minister and is studying international practices on fiscal federalism and revenue sharing. And the fourth working group has been set up under the chairmanship of the finance minister of Balochistan to study a debt strategy between the federal and provincial governments.

The sources said the groups were likely to finalize their recommendations by mid-April to convene the next NFC meeting in the last week of April.

“We will take into account the ground realities with special reference to increased foreign assistance being offered to Pakistan so that maximum favours could be extended to the provinces in the next NFC Award,” said a senior official of the finance ministry.

When contacted, he said that under the directive of President Gen Pervez Musharraf, provincial disharmony would be removed by making available more resources to them and that the federal government would certainly oblige the provincial governments to achieve that objective.

On the issue of huge provincial debts that accumulated due to a high interest rate, he said once the recommendations of the four groups were given to the finance ministry, that issue would certainly be looked into. “We will very openly discuss every thing in the next meeting so that new 6th NFC Award is made acceptable to all the provinces.”

Since there were reports that the government might present the new budget in May instead of June, the sources said the NFC meeting could be convened little earlier to be followed by the meeting of the National Economic Council (NFC) for approving the 6th award along with new broad budgetary proposals.