KARACHI, Aug 30: The National Finance Commission will discuss on Saturday the issue whether the implementation of the NFC award should be decided by the present regime or left to the future elected government, a well-placed source involved in the exercise of resources distribution arrangement told Dawn on Friday.
After a day-long session on Friday, Finance Minister Shaukat Aziz is reported to have held a separate meeting late in the afternoon with finance ministers of the four provinces.
It is not known what transpired in the separate meeting but the source was confident that “majority of the NFC meeting participants were of the view that the issue of implementation of the NFC award should not be left to the future political government”.
He said there was a strong possibility that the present regime might decide about the implementation of the NFC award before the elections.
The source was specifically asked if the NFC award was announced before elections would it be made a part of the current fiscal year’s federal and provincial budgets and what would be the legal and constitutional aspects if it was made operative from fiscal 2003.
“We will consider all legal and constitutional aspects on Saturday,” he said. “We expect to finalize the framework of the proposed formula for resource distribution on Saturday and recommend it to the president and governors of the four provinces,” he said.
The NFC is expected to finalize on Saturday the broad outlines of the proposed resource distribution arrangements between the federal and the provincial governments. It is also expected to lay down criteria and weightages for distribution of resources between the provinces. “We will consider all proposals for laying down criteria,” the source said when asked whether the NFC is considering the proposal of giving due weightage to revenue generation capacity, good governance, size of the province, backwardness and other factors.
The source said the Friday’s meeting had helped in narrowing down the positions taken by the federal and the provincial governments on the issues related to the resources distribution.
The NFC meeting was presided over by Finance Minister Shaukat Aziz. The finance ministers and four non-official members representing the provinces on the commission attended the meeting and discussed the reports of the four working groups.
A press release issued by the State Bank of Pakistan at the end of the first day’s meeting of the NFC on Friday said the provinces had expressed their willingness to reconsider their receipts and expenditures in the light of the discussion on the report of working group on the determination of benchmarks and growth rates.
The Punjab finance minister presented the position of the provinces on their revenues and expenditures over the next five years. The federal government projected the consolidated national resource position of the country over the next five years.
The discussion on this issue focused on the possibilities of the provinces remaining within the resource availability while meeting their requirements of expenditure.
Another major decision of the NFC meeting, according to press release was that the provinces had agreed to bear the additional devolution cost after acquiring resources. The NWFP finance minister presented his report on the devolution cost projected to be incurred by the provinces during the NFC period.
The Sindh finance minister informed the meeting of the various criteria of resource-sharing in various countries. The NFC will continue discussion on this issue on Saturday.
Provinces are reported to have agreed to adopt the debt relief strategy of the federal government to reduce their respective debt burden.