Social, economic damages'' compensation: NWFP wants five percent additional share from divisible pool

The NWFP province has decided to seek 5 percent additional share from the divisible pool to compensate social and economic damages being faced as the front line province in the war against terrorism, sources told Business Recorder on Thursday.
The province will place a request before the upcoming meeting of National Finance Commission (NFC), scheduled on November 18-19 in Karachi, to make war on terror as a component of the criteria for distribution of resources from the divisible pool in view of its long term implications. The Centre and other provinces would be requested to assist NWFP as it is passing through a very challenging time.
When contacted NWFP Minister for Finance, Muhammad Humayun Khan, said that the provincial government would take up the matter in the next meeting of the NFC. He said that Federal government as well as other provinces had supported NWFP on the issue of net hydel profit and hoped that they would also support the war-hit province on this issue as well.
The minister said that the province had received the first tranche of net hydel profit amounting to Rs 10 billion and federal government would pay the residual amount in instalments. He reiterated that the NWFP province is being used as a front line province in the ongoing war on terrorism and has suffered badly on all fronts.
Humayun said that hopes are high for a broad-based formula for distribution of resources under the new NFC award after Punjab''s willingness to accept a multiple distribution criteria instead of the existing population based single criteria. We expect that backwardness, poverty as well as generation of resources would be included in the new criteria for the NFC award.
He said the issue of Gas Development Surcharge (GDS) and GST between provinces and federal government has already been resolved in the previous meetings of the NFC. He claimed that the federal government had conceded to the provinces'' demand of not making GST part of the divisible pool, however, Centre would collect the tax on behalf of the provinces on specific charges.
He further said that the federal government had given the provinces three options for vertical distribution of resources from the divisible pool. The provinces were asked to agree to accept 50pc, 55pc, or 60pc from the divisible pool.
However, he said this formula offered by the Centre would be discussed in detail in the next meeting of the NFC. He said that the Ministry of Finance had given detailed presentations to the NFC Committee on vertical and horizontal distribution along with federal government liabilities including defence expenditure and foreign and domestic debt.