ISLAMABAD, May 10: The federal government is preparing two sets of budget proposals, one on the basis of the provinces' share in the federal divisible pool being 47 per cent and the other on the basis of 37.5 per cent, plus subventions and other grants.

A senior finance ministry official told reporters in a background briefing that the president could issue an ordinance to continue with the existing resource distribution arrangement among the centre and provinces on an ad hoc basis in case a consensus was not reached by the end of next week.

The official disagreed with a suggestion that the federal government was using pressure tactics and threats to make the provinces give up their demand for a 50 per cent share in resources and instead accept its offer of 47 per cent.

He said the government was rather trying to bridge the internal differences. He said that if the provinces accepted 47 per cent from the net proceeds of the divisible pool as offered by the government, the budget would be based on that set of proposal.

But if they rejected the government's offer, the budget would be based on 37.5 per cent of net proceeds of the divisible pool, plus subventions and grants, as available to the provinces under the existing arrangement.

"So, we are ready for both the scenarios. The NFC has to be finalized by the end of next week, otherwise there is no legal hitch in continuing with the existing NFC," the official said.

But in both the cases, their share would be higher because of the broadening of the revenue base. He said there was also no binding requirement for a new NFC because the previous award was finalized after 12 years and was just completing its seventh year.

It would simply require a presidential ordinance to implement the existing NFC award on an ad-hoc basis. He did not agree with a questioner that it would be seen as a failure of the federal government to reach a consensus award.