LAHORE, June 17: Prime Minister’s Adviser on Finance Dr Salman Shah has said no province can disown the interim National Finance Commission Award announced by the president because it has been given under a constitutional amendment.

Responding to a question regarding the concerns expressed by the leadership of Sindh over the interim NFC Award after a post-budget seminar on Saturday, he said the federal government might make changes in the current NFC arrangements if the provinces agreed on a new formula for horizontal distribution of the federal divisible pool funds.

In response to a question about the sugar mills’ offer to sell their existing stocks to the government at import price, he said the sugar industry should bring its stocks to the market instead of making demands like this.

Earlier, speaking at the seminar, Dr Shah gave an overview of the budget for 2006-7 and initiatives announced in it. He pointed out that the consumers’ interest was heavily protected by the government in the budget under the free market economy mechanism.

He advised different industries to become efficient and provide their products to the consumers at affordable prices, otherwise, they would switch to alternatives.

He said inflation was coming down in the country and its average rate was less than eight per cent at present. He expressed the hope that the inflation rate would reduce to 6.5 per cent as targeted in the budget.

Similarly, he said, the fiscal deficit of 4.2 per cent was under control despite external shocks to the economy like high oil prices and last year’s earthquake. “The fiscal deficit could be 3.5 per cent in case there was no earthquake in the country,” he said, adding: “The deficit would come down to three

per cent once expenditure on earthquake rehabilitation is over.”

He claimed that the exchange rate was also stable. The government had allocated over Rs400 billion for infrastructure development and the amount could be doubled with active public-private partnership.

Similarly, he said, the government was spending heavily on human resource development as well as higher education to improve the quality of skill and education in the country.

On the rural side, according to him, the government had allocated a huge sum under the Khushal Pakistan Programme to develop far-flung areas.

He said the government had announced the biggest-ever relief package for the general public, besides over Rs100 billion subsidy.

Tax net had been broadened, he said, and areas like foreign travel, real estate and stock market had been brought into it. Some other measures to document the economy also had been taken, he added.