NFC on way to consensus

The series of meetings between the federal and provincial governments to finalise the sixth NFC Award appear to be inching towards a consensus. The shape of things to come seems to revolve around the acceptance by all stakeholders that the share of the provinces from the divisible pool should be 50 percent.
This is just, as the fifth Award left the provinces bereft with just 37 percent. That Award unfortunately continued under interim arrangements for two years more than its shelf life because the Musharraf government failed to finalise the sixth Award in time. Better late than never, however, and if the press reports are to be believed, a meeting of minds seems to be on the cards finally.
The deadline for finalisation of the Award is March 31, which the participants in the discussions appear confident of meeting.
If the demand of the provinces that their share be increased to at least 50 percent is accepted, the corollary will be the abolition of subventions and special grants, which were originally envisaged as a means of meeting the needs of the less developed provinces.
This would be acceptable provided that the provincial share is fair. It would yield a far more dignified status for the provinces, since subventions and special grants tended to be seen as 'charity' rather than the right of the less developed provinces.
As to the exercise that preceded the finalisation of the Award, ie asking the provinces to estimate their revenues and expenditures over the five-year life of the fresh Award, it turned out to be an exercise in futility.
The implied underpinning of the exercise was that the provinces' projections would be 'needs based'. But the authors of the exercise should have realised at the very outset that it is in the nature of things for stakeholders to exaggerate their claims in the hope of receiving the maximum benefit possible. That is exactly what transpired.
In the case of the federal government, however, the estimates were based on its recently released Poverty Reduction Strategy Paper (PRSP).
Therefore, instead of using 'needs' as the basis for these projections, which by their very nature are limitless, the purpose would have been better served by referring to the limited resources available instead. As the old adage goes, one must cut one's coat according to the cloth.
Now that the provincial share seems poised to increase and subventions and special grants to become a thing of the past, it would be in the fitness of things if the outmoded idea of basing the distribution of resources purely on population was done away with in favour of bringing on board other criteria too.
Basing resource distribution purely on population rewards the majority province at the expense of the other stakeholders on the one hand, and on the other rewards population growth, in direct contradiction with the policy of national population planning.
Instead therefore, of exclusive reliance on this increasingly anachronistic basis, it may be far more just to bring in factors such as revenue generation, distance from revenue generation centres (ie backwardness), etc.
Another factor that may provide a more equitable basis of distribution could be a comparison of the national GNP with provincial GNPs, with distribution being skewed in favour of provinces whose GNP is lower than the national average, so as to bring them on a par with the national norm.
It is, of course, a good sign that all the stakeholders seem to be converging in their views on a just and equitable Award.
Niggling issues that persist, such as the Gas Development Surcharge dispute between Sindh and Balochistan, and the long standing quarrel on the hydel net profit owed by WAPDA to NWFP, could be resolved if the spirit that has imbued the discussions of the Award, so far could permeate the stakeholders on these issues too.
In the case of the latter problem, WAPDA needs to appoint its representatives to the arbitration mechanism that has been set up to resolve the dispute as quickly as possible, so that a fair solution is found soon to put to rest this old quarrel.