PESHAWAR, Nov 14: The MMA government is likely to follow the same policies which were adopted by the previous military-backed provincial government on various issues at the National Finance Commission, sources told Dawn.
“There is not going to be any change in the stance of the provincial government on the contentious issues of net hydel profit and subvention,” said a provincial finance manager who also served at an important post under the previous government.
Tough stand adopted by the previous NWFP government on the net hydel profit issue and allocation of greater resources to smaller provinces from the subvention pool prevented the military government from announcing the sixth NFC award which was supposed to become effective from July 1, 2002.
The NFC constituted by the military government could not accomplish the task of announcing a new award after the NWFP and Sindh did not show flexibility in their stands on certain issues.
The previous provincial government wanted the then federal government to raise the NWFP’s capped share amount of net hydel profit from Rs6 billion per annum to Rs10 billion, helping the province to stand on its own feet by overcoming paucity of funds.
In one of the proposals submitted to the provincial government at that time by the federal government the province had been intimated that the size of its annual capped share amount could be raised either to Rs7 billion or Rs8 billion.
The proposal conveyed by a senior functionary of the federal government contained that in case of refixing the share at Rs7 billion, an annual increase of 10 per cent would be applicable. Whereas, in the case of fixing the capped share amount at Rs8 billion per annum the same would be subject to an annual raise of eight per cent.
“The two sides were close to evolving a consensus over the issue when the negotiations broke down due to the change of government following the Oct 10, 2002 elections,” said the officer who has been involved in the negotiations.
The point that the provincial government would continue with the last government’s stance becomes obvious after it decided to continue with Dr Zubair Khan as its non-statutory member to the NFC, who was initially appointed by the previous regime.
Official sources told Dawn it was not yet clear whether the commission would start deliberations for the new award from the point where the last negotiations got broke down or it would start afresh.
An official said there were greater chances that the exercise would be initiated from the point it was abandoned in the last NFC.
“Except for a couple of disputed issues, the stakeholders had development a consensus on the broad outlines of the new award,” said a senior government functionary anticipating that the federal finance minister would try to convince the provincial governments’ representatives not to touch the issues which had already been resolved by their representatives on the last NFC.
The last NFC had managed to develop a consensus on distribution of resources among the federation and its units on the 60:40 basis instead of the current ratio of 62.5:37.5.
Apart from diverting 40 per cent from the divisible pool to the federating units, the last NFC had also developed a consensus on the creation of a Rs20 billion subvention pool to provide special grants to smaller provinces — NWFP, Sindh and Balochistan.
A consensus had been reached to fix NWFP’s annual share from the subvention pool at Rs6.6 billion, Sindh’s at Rs5.5 billion and Balochistan’s annual share had been fixed at Rs7.8 billion.
As per a decision taken by the last NFC at its meeting held at Peshawar on Sept 15, 2002, the federal government was to contribute Rs15 billion every year to the pool. While the remaining Rs5 billion was to be raised jointly by the three provinces.
“It is not yet clear whether the provinces would debate the subvention pool again or would prefer to adhere to the Peshawar meeting’s decision,” said an officer.