LAHORE, May 16: Punjab sees little chance of finalization of the National Finance Commission (NFC) Award within the current financial year ending on June 30.

“There is little time left between now and the budget. Even if a date for the (NFC) meeting is given in the (next) few days, we (provinces) will require 10-15 days to prepare ourselves and take up the matter with the governor and the cabinet before entering into final negotiations,” a well placed source in the provincial finance department told Dawn here on Thursday.

The sources, who asked not to be named, said the president would have to extend the existing award for another year, which was quite constitutional.

Another official source said the military regime was delaying the finalization of the award because it wanted “political” government that would come into existence after the October polls to make it public.

He claimed that the smaller provinces had “recommended” to the centre at the initial meetings of the commission that the preparation and announcement of the NFC award be left to the future political government because they could handle it in a far better manner.

The sources were hopeful that population of the provinces would be accepted as the basis of the formula for distribution of resources from the federal divisible pool.

“Although population is (actually) not the sole criterion for distribution of resources among the province, it is the most important and the only transparent basis available at present. If the basis of the formula is changed to factor in the backwardness or the size of a province, we would have to develop empirical evidence and data (to support the changes proposed by Sindh and Balochistan). This can be done by setting up a committee comprising independent financial experts but it would take time, maybe a couple of years, before such data or evidence could be developed,” they maintained.

The Punjab has strongly been advocating resource distribution among the provinces on the basis of population in line with the past practice. Sindh is demanding that backwardness be factored in the formula to be devised for distribution of resources from the divisible pool.

The sources insisted that Punjab was getting only about 44 per cent in real terms from the entire resources if “we configure all federal transfers from the divisible pool (for nondevelopment expenditure) under the NFC award, straight transfers, as well as development funds given to the provinces.”

“At present straight transfers and development funds given to each province are out of the NFC basket, although Sindh, supported by the NWFP, has called for inclusion of the development funds in it,” they said. However, they expressed their ignorance about the “real” total transfers to the rest of the three provinces, saying no province had access to the accounts and data. But, they said, “it was high time that this (data) was unbundled so the situation becomes clear to everybody.”

The sources were, nevertheless, hopeful that the share of the provinces in the divisible pool would be raised to about 44-45 per cent from the present 37.5 per cent. “After all, health and education, the major contenders for nondevelopment expenditure, are managed by the provinces.”