President signs NFC award
By Syed Irfan Raza
ISLAMABAD: President Asif Ali Zardari signed on Tuesday the 7th National Finance Commission (NFC) Award for distribution of resources among the centre and the provinces for five years with effect from July 1 this year.
The award was due for the past 13 years, but could not be announced because of a lack of consensus between the centre and provinces.
The four provinces had approved the award in Gwadar on Dec 30.
The president signed the award at a ceremony attended, among others, by Prime Minister Yousuf Raza Gilani, ministers, three provincial governors and the four chief ministers. The governor of NWFP did not attend for reasons unknown.
Speaking on the occasion, the president said Rs110 billion would also be paid to Pakhtunkhwa as its share in net hydel profits. He said Rs10 billion had been paid the current financial year and Rs25 billion per year will be paid for the next four years.
The award stipulates that Balochistan will be given Rs83 billion from the provinces’ share in the divisible pool in the first year. Any shortfall in the amount shall be met by the federal government.
The issue of gas distribution surcharge (GDS) has been resolved and the amount due to Balochistan with effect from 2002 will be worked out on the basis of a revised formula and paid by the federal government.
The centre has agreed to pay the GDS arrears since 1991. This involves about Rs120 billion, which will be paid over 12 years.
The power to impose general sales tax (GST) on services has been given to the provinces. The share of the provinces in the divisible pool has been increased to over 56 per cent.
The factors of poverty, revenue collection and generation and population density have also been taken into account in addition to population for distribution of resources.
Terming the accord a historic achievement of the government, President Zardari said: “It is a victory of democracy, political parties and all provinces and success of the policy of reconciliation.
“I feel that democracy has taken a leap forward. We are trying to lay the foundation of a new Pakistan by adhering to the spirit and vision of Mohtarma Benazir Bhutto.”
He said the signing of the NFC award was a moment of pride for the nation. The president said the nation would hear good news regarding constitutional reforms by the end of this month.
“Democracy that returned to the country sometime back has demonstrated its strength. Let’s give it time to grow, give people of Pakistan a chance to grow and they will prove to be a productive part of the global society,” he said.
The president said some sections of society were ‘misguided’, but he was determined to take the country forward.
The accord showed that political parties and democracy were capable of achieving great things and it was a fine example of national unity, Mr Zardari said.
“It shows that given political will the issue of trust deficit can be addressed.”
Trust deficit: Prime Minister Gilani said the NFC award would reduce trust deficit between the federation and provinces and among the provinces.
Terming the event a real dividend of democracy, he said the political leadership had demonstrated consideration and maturity in arriving at the award.
“Outstanding issues like adoption of multiple criteria for the distribution of resources, payment of net hydel profit to the NWFP and Punjab, the issue of distribution of gas development surcharge and imposition of GST on services have been resolved amicably,” he said.“The federation has displayed largeheartedness in assigning 56-57.5 per cent of the divisible pool to the provinces and given unprecedented autonomy to the provinces for their economic development,” he said.
The prime minister said the NFC award contained certain recommendations of an advisory nature, which could be implemented separately through legislation or administrative measures.
Under the NFC formula, the weight of different criteria in distribution of resources among provinces will be: population, 82 per cent; poverty, 10.3 per cent; revenue, five per cent (2.5 per cent each for revenue generation and collection); and area, 2.7 per cent.