KARACHI, May 5: The National Finance Commission is holding its final and decisive session next Tuesday and Wednesday at Islamabad with no trace of any consensus having been reached between the federation and the provinces and among the provinces on resource distribution formula.

"There is no question of putting signature on any NFC formula that does not provide 50 per cent of divisible pool for the provinces, distribution among provinces is not based on multiple factors that should include revenue generation capacity and 2.5 per cent sales tax is kept outside the pool," Syed Sardar Ahmad, the Sindh Finance Minister declared categorically and in a firm tone.

He said the Federal Finance Minister Shaukat Aziz will hold informal talks with the finance ministers and non-statutory members on NFC of all the four provinces on Tuesday. The NFC will hold formal session on Wednesday.

The Sindh Finance Minister who claimed support of Balochistan said that the NFC formula for distribution of taxation money among the provinces should be based on multiple factors. Besides population, he said the resources distribution should give sufficient weightage to size, backwardness, resource generation and inverse ratio of the population of the province with size.

The federation has no business to retain more than 2 per cent of the total collection of taxes. He said that the federal government has offered 47 per cent of the divisible pool that include 2.5 per cent of sales tax collection.

Sardar reiterated the position that the 2.5 per cent of sales tax collection that amounts to about Rs34 billion in the current fiscal year belong to the provinces and federation has no business to retain it or make it a part of the taxation pool.

At present it looks that if the NFC fails to reach any consensus formula, the resource distribution arrangement of the 1997 award will continue to function. Sardar agreed that status quo in resource distribution favours Punjab and the federation. But it would create intense bitterness and a feeling of alienation among the two Southern provinces, Sindh and Balochistan.

Since the time, the federal government is reported to have offered "six or seven" options on resource distribution formula that also include a small weightage to resource generation capacity, the Sindh coalition government has neither given any thought nor sought clarifications from Islamabad.

In fact, the Sindh coalition of PML (Q), National Alliance and the Muttahida Qaumi Movement never made any effort to lobby with the provinces on NFC issue. "Lobbying comes after the coalition had itself reached some consensus on NFC issue," an opposition member of Sindh Assembly remarked.

He dispelled the impression that opposition parties were indifferent to NFC negotiations. "We gave full and total support to coalition last year on the resource distribution issue and ensured that a resolution is adopted unanimously," he said.