Federal Finance Minister Shaukat Aziz has said that the proposal from the provinces to revise their shares in the divisible pool upwards from 37.5 percent to a level necessary to meet their needs is acceptable to the federal government.
Shaukat was addressing a press conference after the conclusion of the second day of the 6th meeting, in a series of meetings of the National Finance Commission, held at the New Sindh Secretariat here on Thursday.
Earlier, he chaired the meeting of the NFC. Federal Finance Secretary Naveed Ahsan and Adviser to the Finance Ministry Dr Ishfaque Hasan Khan assisted him.
Provincial Finance Ministers Hasnain Darishak (Punjab), Syed Sardar Ahmed (Sindh), Sirajul Haq (NWFP), and Ehsan Shah (Balochistan) attended the meeting. Respective provincial finance secretaries assisted the ministers.
He said that based on the principle of judicious distribution of resources available, the federal government and the four provinces had agreed in principle to accommodate each other and realise complications that might occur due to faulty decisions.
He said that though he would not be able to comment whether the federal government had agreed to the formula of 50:50 distribution from the divisible pool but conceded "the need to shift from the 37.5 to 62.5 seems to be reasonable."
He said that he would stick to the target date of March 31, 2004 for the announcement of the NFC Award, adding that the next meeting, scheduled in Peshawar on February 20, 2004, would be held to iron out minor irritants and arriving at decisions.
Shaukat said that the NFC meeting, "held in Karachi, has narrowed down many issues and the participants have shown their willingness to accommodate each other on a number of issues. There is a willing give and take gesture."
He said that discussions on gas development surcharge (GDS) between Sindh and Balochistan had been fruitful and there was a hope that the two provinces would reach a consensus before the next meeting in Peshawar.
He said that Punjab would also join them in the discussion on GDS.
The finance minister said that the two-day stay of the finance ministers of the four provinces in Karachi was brainstorming and now they would be going back to their homes more clear on many issues and come back with solutions in the next meeting.
"When they go back they would exchange views with their colleagues and others and reach decisions needed to be taken in the next meeting."
The unusually tight-lipped finance minister did not tell any figure pertaining to sharing formula from the divisible pool between the federal government and sharing formula among the provinces from the allocation. He asked the newsmen to wait till final decision had been taken.
He said that the committee was faced with ticklish questions that participants were trying to address. "Any one figure or one portion of the formula would be grossly misleading. Leave all figures and formula till the final meeting is over," Shaukat said.
The federal government has probably shifted its stand from the population consideration to multiple factored formula such as population, backwardness, revenue generation and area as the provinces that were asking for these considerations to be included in the formula expressed their satisfaction over the Thursday's proceedings.
"We are likely to reach a consensus on many issues and there is a hope that the less developed provinces would get their share," NWFP Finance Minister Sirajul Haq said.
He said, "We are trying to reach consensus. The desire and the will to accomplish the work assigned to us is there."
Siraj said that judicious distribution of resources was the prerequisite for the success of the entire exercise. "If the sense of deprivation is not addressed, nothing tangible would come out of this meeting," he added.
He said that they were thinking in terms of their own interest, in terms of the interest of other provinces and the federal government as the purpose of the NFC meeting was to protect the interest of the people of Pakistan.
To a question he said, "We want judicious distribution of resources and the subvention money, which is a sort of charity is not a welcome thing for us."
Punjab Finance Minister Hasnain Darishak said that during the meeting the ministers listened to each other and cleared their views on a number of suggestions that were coming from their counterparts for the solution of problems and many apprehension were cleared.
He said that a rationale was being developed to determine a formula for the distribution of resources. "We have reached the final stage and a decision is expected even before the next meeting on February 20 as the ministers would remain in contact with each other during this time."
He said that Punjab would like to participate in the discussion on GDS that would primarily be discussed between Sindh and Balochistan.
Balochistan Finance Minister Ehsan Shah said that the members of the NFC had developed consensus on many issues and the irritants would be removed in the next meeting. He said that he had his reservations on the GDS.
He said he would discuss this issue with his counterpart in Sindh and would try to reach "some kind" of understanding.
Sindh Finance Minister Syed Sardar Ahmed, host of the meeting, said that the proceedings of the meeting moved in the right direction.
He said he would not like to say much on the subject except that an agreement in principle on major issues had been reached and only finishing touches were needed.
According to 1997 NFC Award, the share of the federation from the divisible pool is 62.5 percent and the provinces get 37.5 percent. The entire distribution has been based upon population.
Out of this 37.5 percent, Punjab gets 57.88 percent, Sindh 23.28 percent, Balochistan 5.30 percent and the NWFP gets 13.54 percent.