KARACHI, June 7: The seventh National Finance Commission continues to exist till the year 2010 and can be convened either on suo motu by the chairman or requisitioned by any member to amend the interim grant in aid and resource distribution formula given by President Musharraf in 2006.

“In fact no formal meeting of the 7th NFC was ever held after it was constituted in the year 2005,” Syed Sardar Ahmad, former finance minister of Sindh, said. He wrote a letter to Chief Minister Syed Qaim Ali Shah recently to inform him that the 7th NFC continues to exist and can be convened after the provinces nominate their non-statutory members.

He said that the 7th NFC was formed in 2005. Immediately after the formation, the finance ministers of the provinces were called and were given a briefing on the outlines and framework of the proposed award. “It was not acceptable to Sindh and I wrote a detailed letter to project my government’s views,” he recalled.Thereafter, no formal meeting of the NFC was ever convened and the president issued his own interim order for distribution of revenues and grant in aid (amendment) order 2006 on the basis of which provincial budgets for the years 2006-07 and 2007-08 were framed.

The next budget for the year 2008-09 will be the third consecutive budget on the basis of president’s interim resources distribution formula, which is open to changes and amendments by the NFC.

Although no one in the government was available to respond to the position taken by Syed Sardar Ahmad, a retired bureaucrat, who held responsible positions in his career. After retirement he became senior minister of the cabinet, who looked after the financial affairs, health department and also home.

But many political activists, lawyers and those from business give weightage to Sardar Ahmad’s views and plead for quick amendments in the resources distribution formula rather than re-constituting the 8th NFC with new terms of reference and beginning anew a fresh exercise.

“The PPP is there in centre and is well represented in all four provinces,” a business leader of Karachi Chamber of Commerce and Industry argued. He contends that it should not be difficult for the PPP to seek a consensus on fundamental issues.

While Punjab insists on retaining population as the only criterion for distribution of resources among the provinces, Sindh, Balochistan and the NWFP want multiple criteria, in which resources generation capacity of the province, economic backwardness and a few other factors be given consideration.

“If you make population the only basis of distribution of resources and allocation of government jobs to the provinces, you encourage federal constituents to suppress all efforts of population planning,” Taj Haider, a former PPP Senator, who was on NFC as Sindh’s representative in 1995, jokingly remarked.

But there are indications that the ruling coalition is now giving a serious thought to re-open the resources distribution formula. On June 4, the finance minister of Punjab held a meeting with ministers of three other provinces in Lahore and in a joint press conference demanded a greater role for the provinces in development efforts and revenue generation and contain the role of the federation.

Political activists in Karachi believe that once the thorny political issues are taken care of, the leadership of the four coalition parties (PPP, PML-N, ANP and MQM) is bound to give all attention to transfer of more responsibilities, powers and financial resources to the provinces.

“Provinces and local bodies do real nation-building work and should be given more resources,” a local PML-N leader asserted.