The NWFP will get Rs 61 billion additional resources for next financial year in the 7th National Finance Commission (NFC) Award announced by the federal government recently.
Briefing media persons here about achievements for the province in the NFC, provincial Minister for Finance, Mohammad Hamayun Khan, said that beside increased share in the divisible pool the province would also receive Rs 15 billion as cost of war on terror.
Flanked by Member Technical NFC, Senator Mohammad Adeel and Secretary Finance, Mohammad Saeed, the minister said that federal government would pay 1 percent of the undivided divisible pool to the province. "The decision of the payment of additional 1 percent of the divisible pool has been agreed with consensus by all federating units," he added.
Elaborating the salient features of the 7th NFC Award, he said that amicable resolution of the distribution of resources between federal government and federating units has spread a wave of happiness in the nation. "The people had heard the good message of success on issue of 7th NFC Award after a long wait of 18 years," he said.
For first time in the history of the country instead of the single criterion, the distribution of resources has been made on multi-criteria formula by including population, IPD, poverty, backwardness and revenue collection/generation.
In the 7th NFC Award, he said, 82 percent distribution would be made on population, 10.3 percent on poverty and backwardness, 5 percent revenue collection/generation, and inverse population density (IPD) 2.7 percent. Similarly, in vertical distribution, federal government has allowed increase in the share of the provinces with 56 percent for first year and 57.5 percent for remaining years. This increase, he said, would help NWFP to receive Rs 129 billion as compared to Rs 92 billion of the current financial year. In the new NFC award, federal government had cut down its collection charges from 5 percent to 1 percent, which would largely benefit the provinces.
The minister said that the NFC team of NWFP demanded cost of war on terror fought on the soil of the province. The demand was accepted after detailed discussion. Federal government, he said, would pay 1 percent of the divisible pool before distribution, which would be more than Rs 15 billion. Furthermore, all expenses of the war on terror would be born by the federal government. He said that earlier the federal government used to take 55 percent share of the general sales tax on services while remaining 45 percent were shifted to provinces and now 99 percent of the tax would be transferred to provinces and remaining 1 percent would be received by federal government in head of tax collection.
The finance minister said that all provinces sacrificed their own share to remove the sense of deprivation of the people of Balochistan. Balochistan, he said, would now, instead of 5.1 percent, will receive 9.1 percent and will receive total Rs 83 billion for first year. "The award has given full attention to Balochistan to redressed the problem of deprivation of the province," he added.
The award remained important for NWFP as the longstanding dispute of the province with Wapda on the net profit in head of electricity was also resolved through this forum. The federal government accepted the onus of the payment of Rs 110 billion as per decision of the arbitration tribunal. An amount of Rs 10 billion has been paid to the province and remaining Rs 100 billion would paid in four years with equal instalments of Rs 25 billion each year. The issue of the payment of Rs 151 billion in head of 10 percent mark-up has been referred to technical committee.
The finance minister paid tributes President Asif Ali Zardari, Prime Minister Yousuf Raza Gilani, Finance Minister Shaukat Tarin, PML-N chief Nawaz Sharif, Asfandyar Wali Khan and Chief Minister Ameer Haider Khan Hoti, whose dynamic leaderships helped the people to see the historic achievement.
Senator Adeel said that increase in the share of the province in the divisible pool reflects the trust of the federal government in the federating units.
He appreciated the role of Finance Minister Shaukat Tarin, who exhibited keen interest in the resolution of the problems of small federating units. He also attributed the resolution of the longstanding dispute with Wapda on payment of net profit on hydropower generation.