KARACHI, March 31: Planners and budget makers in Karachi and Quetta are in a quandary as the current fiscal year 2004-05 enters on Friday the fourth and the last quarter with no hints coming from Islamabad on the convening of the National Finance Commission (NFC).

March is the month when planners and budget makers start making preparations for the next fiscal year’s budget. All provinces depend 85 to 90 per cent on the funds they get as their respective NFC share from the pool of federal taxes. A rule of the thumb is to add 14 per cent to the revenue expenditure budget and expect a 10 to 12 per cent increase in NFC share of taxes.

With hardly 10 to 12 weeks left for preparing and giving a final shape to the budget for 2005-06, the budget makers find it difficult nay impossible to come out with precise solutions of very pressing financial issues when there is absolutely no indication of how much resources would be available. Trapped in a helpless situation, the finance ministers of both Sindh and Balochistan have preferred to stay quiet and continue with their jobs that keeps national flag flutter on their cars.

In Karachi, the budget making appears to be a strictly in-house affair of the bureaucrats in which even the elected legislators of the ruling coalition are also not taken into confidence. The ruling Muttahida Qaumi Movement (MQM) has taken a position on the NFC issue but it is avoiding to put federal government and the President General Pervez Musharraf in the dock.

A pre-budget meeting organized by the elected legislators of the People’s Party in Sindh Assembly in March proved to be a mock exercise rather than a serious attempt to address the issues. Nisar Khurho, the leader of the opposition in Sindh Assembly and Shazia Marri were answerless when asked if their party would consider increasing tax share from the income of feudals in their province. “Would you demand land reforms or at least the implementation of package given by late Zulfikar Ali Bhutto in 1977?” The PPP leaders were dumb.

The PML (Q) is a bunch of non-serious feudals from the interior of the province who are more interested in getting development funds for the schemes of their respective constituencies. Mostly, the contractors of such development projects are close relatives or friends of the MPAs and the ministers.

“It was a performance budget this year,” a young officer in the Planning Department remarked while recalling Sindh Finance Minister’s post-budget speech before the media last June. “How many times the Finance Minister has taken media into confidence on budgetary performance since that announcement,’’ he enquired.

“No one has bothered to check whether Sindh government’s commitment of a free and compulsory education up to Metric made in 02 has been fulfilled,” the young officer sarcastically pointed out.

In terms of constitutional provisions, the term of the 1997 NFC award has expired in the year. This was, because the federal government, in the first instance, refused to offer more than 48 per cent of the federal tax pool to the provinces. Punjab insists on keeping population as the only basis for resources distribution. The three provinces Balochistan, Sindh and NWFP want a multiple criteria for resources distribution.

President General Musharraf’s announcement in February to offer 50 per cent of tax pool to the provinces and “to accommodate as much as possible” the views of the provinces in matter of resources distribution created some hopes for a quick consensual formula. The Prime Minister and his Adviser on Finance also came out with statements dropping hints of early convening of the NFC.

At present both Balochistan and Sindh are under financial stress. A Rs10 billion overdraft of the Balochistan with State Bank of Pakistan has been converted into a soft loan. Balochistan will clear this loan in next three years in monthly instalments. Sindh too, is under severe financial stress.

Balochistan finds implementation of Rs14 billion development programme impossible. A development grant of Rs3 billion given by Prime Minister Shaukat Aziz in January this year during his visit is apparently peanuts considering the magnitudes of Balochistan’s problems.

Sindh’s Rs 18 billion ADP is more a publicity gimmick then a serious development road-map. In first six months hardly 18 per cent amount was released and utilized. It is a convenient gimmick package of a very uncomfortable political alliance that rules this province. Finance and planning ministers of the two provinces have not given any review of finances and pace of implementation of their development plans.

The finance ministers of the two provinces — a retired bureaucrat in Sindh and a second generation settler in Balochistan — are discreetly quiet on all these issues which have deep implications on the social and economy of their respective provinces.