KARACHI, May 6: The National Financial Commission Award is likely to be finalized in two weeks as things were fast moving in the right direction. The award will be between Rs250 and Rs270 billion. This was stated by the adviser to Prime Minister on Finance, Dr Salman Shah, in a meeting with the members of SITE Association here on Friday.

He said the main problem with the NFC is the distribution of resources amongst the provinces but now they were certai that they would reach a consensus formula within a period of one or two weeks.

Each province is expected to get Rs20 to Rs25 billion additional funds in new NFC award and the total amount of the award could be Rs250 to Rs270 billion, he said.

He said that it was a constitutional obligation regarding NFC that a consensus formula existed amongst the provinces, he said.

Dr Shah said the federal government was making all sincere efforts to finalize the award before the budget for 2005-06.

Briefing about the current status of the NFC Dr Shah said the major issues amongst the provinces regarding new NFC award were to determine the share of each province in revenue generation, allocation of shares on the basis of tax collections.

He said Sindh and Balochistan were disputing over gas development surcharges/royalty.

Sindh and NWFP had different opinions regarding revenue generation formula. Sindh was advocating for its NFC share based on revenue generation, whereas NWFP rejected it maintaining that in that way a richer province would be getting more and more.

Again these two provinces differed on the distribution of 2.5 per cent share from general sales tax, which was already going to the provinces. Sindh had pleaded that the allocation be based on historical collection of “zila “ taxes while NWFP said this fund was originally meant for local governments and as such the distribution should be based on population of each district.

He said the solution seemed that NFC should be based 50 per cent on revenue generation and 50 per cent on population.

He said the issue of gas royalty distribution between Sindh and Balochistan was being resolved through extensive dialogue.

“Hopefully, the two provinces would settle the issue soon,” he remarked.

The Advisor said so far vertical distribution was concerned there was nothing serious to be resolved. Provinces were demanding 50% share in NFC while Federation wanted to give 47% share in the coming award which would be increased later by one percent in every next award to ultimate increase to 50% of total national divisible pool.

Dr Shah said in the next scheduled meetings of Lahore and Peshawar there would be a consensus formula on NFC award.

Dr Shah asked the members of SITE Association to list out their priority areas regarding the up-gradation of infrastructure in SITE area so that the government could move forward with a specific plan and the allocation of required funds.—APP