Musharraf's intervention

President General Pervez Musharraf, no doubt alarmed as everyone else is at the continuing impasse on the National Finance Commission (NFC) Award, has asked Federal Finance Minister Shaukat Aziz to reconvene the NFC and has met the provincial chief ministers to resolve the issue.
Many voices have been raised of late asking for just such a presidential intervention in the face of the seemingly intractable divide between the Centre and the provinces on their respective shares of the divisible pool, as well as amongst the provinces on the formula for the distribution of resources available to the provinces.
Given the ground realities of the power structure that exists today, it may have been possible for the President to simply impose the best possible Award on all the stakeholders, but it seems he has considered it appropriate that the process be carried forward to achieve an elusive consensus so that all the stakeholders own the Award.
When the last meeting of the NFC broke up without resolution, the situation had boiled down to the Centre raising its offer to the provinces to 47.4 percent of the divisible pool.
Later, press reports said the Centre was willing to go up to 48 percent, with annual raises in this share until it reached 50 percent by the end of the sixth Award in five years time.
This 50 percent, it may be recalled, was the unanimous demand of all the provinces. While it is right that the provinces' fiscal needs should be accommodated so that the whole thrust of devolution of power (including financial powers) can be implemented in letter and spirit, the provinces too need to acknowledge the constraints of the federal government in terms of the security and defence environment in which the country is currently placed.
There is merit, however, in the argument of the provinces that duplication of ministries at the federal level that rightfully belong in the provincial sphere is a waste of resources that could otherwise be available for the provinces.
The Centre's rather high collection charges of 5 percent too need to be reviewed and brought down to something more reasonable. As such changes and reforms are implemented, whatever additional resources are released should be given to the provinces so that their complaints are allayed to some extent.
As far as the distribution of resources amongst the provinces is concerned, although the 94:6 formula suggested by Prime Minister Zafarullah Jamali in the last NFC meeting seeks to meet the sometimes contradictory concerns and demands of the provinces, perhaps a better approach may be to first settle matters in principle, leaving the detailed weightages claimed for various factors, to be negotiated subsequently.
For example, Punjab's insistence on population being the major, if not sole, factor to be considered has been met to a large extent by the weightage of 94 percent to population.
The remaining 6 percent, it has been more or less agreed by at least three provinces, should be distributed by taking into account backwardness and inverse population density. But this too has got bogged down because of Sindh's insistence that revenue collection be accorded due weightage, a demand that has so far failed to move the other provinces.
The best approach that suggests itself to break the logjam is to agree in principle that each province's top priority demand be accommodated to the extent possible, so that all the provinces feel satisfied that they have received a sympathetic hearing and treatment.
Once this is agreed in principle, the detailed weightages can be negotiated in hopefully an atmosphere of greater harmony, goodwill and accord, a climate that has been conspicuous by its absence in the councils of the NFC so far.
Accommodating each province's topmost priority to the extent possible will help the provinces feel a sense of ownership regarding the fresh Award, without which it could again engender bitterness down the road.
In the interests of national unity, solidarity and harmony, therefore, all the stakeholders, the Centre and the provinces, need to take a deep breath, think coolly and come together on the basis of give and take to achieve a badly needed consensus on the NFC Award.