Despite its commitments to fiscal autonomy, the PPP-led Sindh government hardly seems to have drawn up a feisty case for the ensuing National Finance Commission (NFC) meeting. However, it would put forward its case for getting maximum share from the federal divisible pool (FDP) whenever the NFC meeting, not yet scheduled, is held.

Special Finance Secretary Ms Naheed S. Durrani is not sure about any positive outcome from the NFC meeting; yet she says that the Sindh government was fully prepared for forcefully presenting the case before the NFC to get its rightful share from the federal divisible pool.

“Sindh's case is ready and now it is the job of politicians to strive

to get the province's share. But much hinges on the political climate at the time when the NFC meets; every province will be trying to get as much share as possible from the FDP”, she opined.

Asked as to when the NFC meeting was scheduled, she said she was not aware of it. However she felt that it was not likely to take place in coming months as the federal government is busy improving the deteriorating law and order situation.

The special finance secretary felt it is not going to be resolved in a month or two. “I don't think that all the concerns of Sindh on revenue distribution could be addressed in the next NFC meeting. Maybe, this time political leaders will have to try to sort out their concerns outside the meeting and take some confidence building measures on this score.”

Sources in the Sindh finance department believe that the row over revenue distribution amongst the province is not going to be resolved in the NFC meeting and added that perhaps it will require plethora of meetings at the federal level to reach an effective solution acceptable to all provinces.

The sources, however, told Dawn that if this issue does not get resolved in the upcoming NFC meeting, the Sindh government will have to wait until next year to pursue its case.

The allocation from the federal divisible pool (FDP) under the National Finance Commission Award (NFC) continues to be a cause of discord and mistrust among the four provinces.

The three provinces excluding Punjab, which takes away lion's share from FDP despite its lower revenue contribution,disapprove of the resource distribution on the lone criterion of population.

Economic experts say, the population-based formula has led to disparities in the capacities and needs of the smaller provinces.

The resource distribution issue, they think, has aggravated further due to delay in holding the nationwide census which was expected last year as the population has increased manifold.

They suggest that the Sindh government should arrange a provisional census of Sindh by its Bureau of Statistics which comes under the Sindh Planning and Development Department.

Many feel upset over Sindh government's lack of seriousness on this core issue, saying the present government seems to have hardly taken any serious initiative to look at the issue and arrange holding of census at provisional level.

But this time, the three smaller provinces appear to have adopted an unbending position against what they term unjustified resource distribution under the lone population formula.

Sources in the seven-member Sindh committee on NFC Award say the Sindh government has urged the federal government to announce a new NFC Award for FY 2009-10 on the multi-criteria basis --- population, revenue contribution, geographical importance and backwardness of the province.

The committee headed by Sindh Minister for Local Government Agha Siraj Durrani as its chairman, entrusted with hammering out recommendations for the new NFC Award consists of ministers Syed Murad Ali Shah, Jam Saifullah Dharejo, and Shazia Marri, Taj Haider and Qaiser Bengali and financial experts as other members.

Eminent economist Qaiser Bengali was not very optimistic about the new NFC Award; whether if announced, it will be on the basis of multi-criteria. He said, some of the core issues that continue to keep the provinces including Sindh and the federal government divided, apart from deepening the political rift among them are general sales tax (GST) on services/utility and modus operandi of revenue collection.

Taj Haider, PPP leader, terms the GST collection on services by federal government as an unconstitutional act as it denies the inalienable rights of the provinces.

He told Dawn “Some Rs60 to Rs70 billion revenue is generated every year in Sindh alone under the GST on utility head, which is unconstitutionally being gulped down by the federal government for the last several years.

“Whilst the GST issue has been taken up with the centre by the provincial government, the passage of a unanimous resolution on this very issue in the Sindh Assembly has substantiated the Sindh government's stance on the matter at the federal level. Now a decision is awaited in the next NFC Award meeting,” he added.

The Punjab government has however raised various issues with Sindh over revenue collection claim, saying that not all the revenue collected in Sindh is actually generated by it. For example, the custom duty charged on the products manufactured in Punjab should not be counted as the revenue generated by Sindh.

Qaiser Bengali informed this scribe that Sindh government has delivered six letters to the federal government on revenue generation. But, these letters have been responded with what he termed, by a standard bureaucratic reply of not more than a line.

He suggested that there should be a decision in principle amongst the provinces over this matter. Then it would help determine under an unanimously agreed formula that what and what not comes under revenue generation and revenue collection to resolve this issue once for all.

Shazia Marri, Sindh information minister, regretted that the province has been getting merely 23.71 per cent annual share from the federal divisible pool since the caretaker government set up in 1996-97 whilst it contributes revenues up to 65 per cent.

Terming the interim NFC Award given by the Musharraf regime as unconstitutional, she said it did not reflect the wishes of the three smaller provinces. She recalled that Benazir Bhutto had promised that after coming in power, her party will give a new NFC Award based on the multi-criteria basis.

With PPP in power at the centre and in Sindh, the party has been put to a critical test. So far it appears that the interim NFC award will be retained while formulating the next year's budget.

email mohammad.saleem@dawnnews.tv