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7th NFC Award signed in Gwadar

December 31, 2009

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GWADAR, Dec 30 The Seventh National Finance Commission Award was signed here on Wednesday by the finance ministers of the four provinces and the federal government.

The signing was witnessed by Prime Minister Yousuf Raza Gilani, Punjab Chief Minster Shahbaz Sharif, NWFP Chief Minister Ameer Haider Hoti, Balochistan Chief Minister Aslam Raisani and members of the federal cabinet, while Sindh Chief Minister Qaim Ali Shah signed the accord because he holds the portfolio of the provincial finance ministry.

The award will come into effect from the next financial year.

Federal Finance Minister Shaukat Tarin said the provinces would get Rs227 billion in the first year under the new NFC award in addition to their current share of Rs550 billion in financial resources. The amount will increase to Rs850 billion the following year and to Rs1,250 billion by the fifth year.

“This is the first step towards financial autonomy of the provinces and a victory of democracy,” he said.

Mr Tarin said that it was a philosophical shift in government policy which would greatly enhance the shares of the provinces.

He said the federation had given a considerable share to the provinces and the credit for the gesture went to President Asif Ali Zardari and Prime Minister Gilani.

For the first time, factors other than population had been considered and the critical issue of distribution among the provinces had been resolved, he said. He gave the credit for this achievement to the Punjab chief minister and finance minister.

Mr Tarin said a demand of the NWFP for compensation of losses suffered in the war on terror had also been addressed and the province would get one per cent from the non-divisible pool on this account.

He said that the award had been agreed unanimously and a committee would hold quarterly meetings to review its implementation.Mr Tarin said the government would reduce its expenses to help increase the share of provinces.

He said the federal government needed to increase its revenue collection from 8.8 per cent to 13.9 per cent and cut its expenses from 14.1 per cent to 12.5 per cent by 2014-15.

He said that there was mistrust between the provinces and the federation and also among the provinces when the NFC talks began 10 weeks ago. The forum had also helped in sorting out other financial issues between the federation and the provinces, he said.

Under the award, Balochistan's share in the provincial pool had been increased to 9.09 per cent, which will amount to Rs83 billion in the first year.

After considering special needs of Balochistan and application of multiple indicators, Punjab has been allocated a share of 51.74 per cent, Sindh 24.55 per cent and the NWFP 14.62 per cent. The share of Punjab has dropped by 1.27 per cent, Sindh by 0.39 per cent and the NWFP by 0.26 per cent.

The distribution is based on 82 per cent weightage to population, 10.3 per cent to poverty, 2.5 per cent to revenue generation, 2.5 per cent to revenue collection and 2.7 per cent to area.

The provinces' share in the divisible pool will increase from the current 47.5 per cent to 56 per cent in the first year and 57.5 per cent afterwards.

Speaking on the occasion, Punjab Chief Minister Shahbaz Sharif said the NFC had effectively addressed the sense of deprivation of provinces and their dissatisfaction with the federation and now the provinces believed that they also had a right over the resources of Pakistan.

He said that NFC would have a positive impact on Balochistan, but trial of former president Pervez Musharraf must be held for the murder of Nawab Akbar Bugti.

Sindh Chief Minister Qaim Ali Shah said the provinces had shown great unity and the spirit of accommodation for each other which was the need of the hour. He termed the event a win-win situation for everybody. He said the process had been started with the spirit that distribution should be based on the needs of the provinces.

He said Balochistan's share had been increased because it had been kept backward in the past.

He said that after agreeing on financial distribution, the provinces could also reach a consensus on political harmony and reconciliation.

He disagreed with the contention of nationalist parties that Sindh had lost its share.

He asked the gathering to pray for the victims of the Karachi bomb blast.

NWFP Chief Minister Ameer Haider Hoti said the accord would provide sufficient funds to the provinces for meeting their requirements independently. “We have laid the foundation for strengthening the provinces,” he said.

He said the future of Pakistan and Balochistan was interlinked.

Mr Hoti said his province was fighting the war against terror for the survival of the country and had achieved significant successes.

Balochistan Chief Minister Aslam Raisani said that it was the start of the struggle for the rights of Balochistan. “This is a good beginning.”--APP