Finance minister for making NFC an autonomous body: debate on Sindh budget concludes

Sindh Finance Minister, Syed Sardar Ahmed has said that the National Finance Commission should be an autonomous body, independent of the Constitution and comprised of neutral members from the civil society; so that just and equitable solution of resource distribution among the provinces could be found out on a permanent basis. He was winding up the debate on budget 2005-06 in the Sindh Assembly on Saturday. Speaker Syed Muzaffar Hussain Shah was in the chair.
Sardar Ahmed said that a neutral NFC should be set up and its members should come from the civil society. They should necessarily be technocrats. The head of such a commission could be a retired governor of the State Bank or a man of comparable stature, the minister opined.
He said that out of the four federal taxes the government should give us sales and income tax collected in Sindh and the needs of the province would be met. "Similar formula should be adopted in respect of other provinces," he added.
The minister said that when the present government took over power it had inherited Rs 10 billion loans liability, taken by the previous government from the SBP. "We have not only paid off this liability but have Rs 15 billion in cash balance."
He said that the previous governments were dependent upon cash development loans but the present government had not taken that kind of financial support to run its development programmes.
He said that Sindh wanted to retire its expensive loan after borrowing money from the local market but the federal government had turned down its request to do so.
Sardar Ahmed said that the high rate of interest federal government was charging from the Sindh government was a permanent source of financial burden on it.
He said in two years the provincial government had paid off Rs 7.5 billion out of the total outstanding loan. "We have therefore saved Rs one billion interest on the outstanding loan."
The rate on which the provincial government has taken loan from the federal government ranges between 14 percent to 18 percent, the minister said, adding unlike the previous governments the present government would fund its development projects from its own resources.
"We have been doing this in the past and we would do the same this year and you would see that Rs 24 billion allocated in the ADP 2005-06 would become available. This allocation on which there is lot of criticism would become available to opposition's surprise."
He said that allocations in different heads for development work were based upon the past performance of different departments. However, to make these departments more effective and efficient in project implementation the release of funds would be in two stages. The first instalment of 50 percent would be released in August and the second in January. "All releases would be transparent and based upon merit."
The finance minister said that allocations for the education, health and social sector development had been increased. Sardar Ahmed said that the flow from the NFC was not in lump sum. "It comes in regular monthly instalments. Therefore those who fear that the province would not be able to get its share are not fully aware of the reality. They should know it as they have remained in power and have been preparing budgets. I would request them to be realistic and try to understand the issue."
He said as far as they were concerned they had received ten instalments so far. "Let us receive the last release and we would be able to tell you the amount we could manage to get from the federal government for the 2004-05 financial year."
The minister said that the creation of three billion rupees social relief fund was unique feature in the Sindh Budget 2005-06. It would be for the poor and the needy. Senior citizens would also get benefit from it.
He said that the opposition should know a little bit of economics. "They even do not know the basics of fiscal administration." Sardar Ahmed said he did not know how they were drawing budget when they were in power.
He said that federal transfers were usually intimated to provinces one month before the budget exercise begins. "We were intimated by the federal government that federal transfer would be Rs 81 billion. This intimation came to us on 24th May and on 13th June we received the money. Therefore, whether we get Rs 81 billion or Rs 86 billion it all would come to the province and therefore I do not see any point in agitating on this issue. In fact there is no issue involve in it."
Sardar Ahmed said that deficit financing was a tool and a method of budgeting. "Deficit financing is necessary for development." He offered opposition members to visit his office, sit with the staff and learn something about economics.
He allayed all allegations against the Sindh government that it had succumbed to the pressure of the federal government and said that the province still remained stuck to its stand on NFC Award, that, "It should be on multiple criteria and revenue-collection basis. An NFC Award short of this criteria is not acceptable to us."
The Sindh finance minister was of the view that budget making in the absence of the NFC Award was absolutely legal and in conformity with the rules. "The Article 160 of the Constitution had nothing to do with budget-making of a province. Under Articles 118-125 of the Constitution the matter is clear. At the same time sub-section 2 of Article 160 has made everything clear."
He said that he would appeal the opposition not to confuse issues and let the people be aware of the reality.
Earlier, Leader of the opposition Nisar Ahmed Khuhro spoke on the budget and said it was a pack of lies and a document full of errors.
He referred to various figures and allocations and said that these figures had been fudged.
The PPPP leader said that transfers from the divisible pool had been reflected at Rs 52 billion, whereas it should be Rs 57 billion. Similarly Rs 81 billion had been shown as received from the federal government against Rs 86 billion announced by the finance minister at his post-budget press conference.
He said that these and many other figures were either typographical mistakes or simple errors of calculations.
Nisar Khuhro said that increase in the budget by about 12-13 percent was no big achievement as the inflation would eat up this amount and the government would remain at a disadvantageous position.
He said, "Had there been the formula given by the PPP government there would have been Rs 89 billion from the divisible pool instead of Rs 56 billion announced by the finance minister."
The opposition leader said that tourism and culture, women development, fisheries, science and information technology were those departments that had shown poor performance during the current year, as had been mentioned in the budget speech of the finance minister.
He said that allocation for law and order was being increased from Rs 11.5 billion Rs 13 billion and added that more the money more were the chances that crime would increase in the province.
Khuhro said that misappropriation and graft were on the increase and funds for development released at the end of financial year make their way into the pockets of the corrupt.
Others who took part in the budget debate included Minister for Irrigation and Power, Nadir Akmal Leghari, Shabbir Qaimkhani, Aamir Malick, Jam Saifullah Dharejo, Ghulam Qadir Chandio, Sassi Palejo, Umer Sadiq, Ahsan Jatoi, Makhdoom Jamiluz Zaman.
The proceeding, which began at 10:45 am, continued till 6 pm with prayers break of 50 minutes. The session would meet again on Monday at 9:30 am.