Poverty incidence highest in Punjab, NFC told
Courtesy: The News, Saturday, August 29, 2009
Two committees to finalise vertical, horizontal resource distribution
By Khalid Mustafa
ISLAMABAD: On the second day of the meeting of the National Finance Commission (NFC), the participants were in for a rude shock when they were told by Punjab that it had the highest poverty incidence in the country, even more than Balochistan. The revelation came in the form of an exhaustive presentation made by the Punjab delegates here on Friday.
Arguably a well-researched document, the presentation successfully questioned the myth that Punjab was benefiting unfairly or excessively from the existing resource distribution formula based on population, arguing the province was getting just 47 per cent allocation from the divisible pool against its 57 per cent population.
The province of 80 million people, however, for the first time also asked for the net hydel profit of Mangla dam arguing its power house falls in the jurisdiction of Punjab.
“We have also placed the demand, seeking net hydel profit of Ghazi-Barotha hydropower project that has been worked out at Rs18 billion during the last six years,” Punjab Finance Minister Tanvir Ashraf Kaira told the media after the first break in the ongoing meeting.
“We have so far not worked out the volume of net hydel profit of Mangla dam, but we will claim the said dues as under the Constitution Punjab qualifies for hydel profit as the power house of Mangla falls in its jurisdiction,” he said.
“The two-day meeting of the National Finance Commission (NFC), which met under the chairmanship of Federal Finance Minister Shaukat Tarin ended with a decision to form two committees for vertical and horizontal distribution of resources amongst the four provinces,” Sindh Chief Minister Qaim Ali Shah told the media persons. The committees will consist of provincial finance secretaries headed by the federal finance secretary. They will recommend distribution of vertical resources.”
The first committee will thrash out the benchmark of expenditure of provinces and the centre also. Qaim said in the secretaries’ committee two lady secretaries have also been included.
The second committee, comprising all NFC members and headed by Shaukat Tarin, will take up matters relating to horizontal distribution of resources amongst the provinces. It will also submit recommendations on issues such as impact of war on terror in the NWFP and Balochistan, net hydel profit and GST on services. “The terms of reference for both the committees will be issued shortly.”
All the provinces were unanimous that GST on services should be handed over to the provinces from the NFC’s purview.
Qaim said the federal finance ministry made a presentation to the NFC members about the position of national economy and the federal government’s financial transfer formulas being followed in the past and at present. The provincial representatives also briefed the NFC members, through presentations, about the financial position and economic problems of their respective provinces.
“The next meeting of NFC would be held in Quetta on September 18-19, 2009, which will consider reports of both the committees. The two sub-committees will now meet on Sept 4-5.”
As far as poverty incidence in Sindh is concerned Qaim said according to the World Bank it stands at over 45 per cent and as per Rural Support Programme it ranges between 45 to 55 per cent. Qaim said Sindh advocates for horizontal distribution of financial resources.
Punjab Finance Minister Kaira said per capita financial resources distribution in Punjab stand at Rs3,073, Sindh (Rs4,826), NWFP (Rs4,032) and in Balochistan at Rs6,365.
He said these figures have been acquired from the centre and according to them poverty incidence is highest in Punjab. When this scribe wanted to know if this meant that Balochistan was the most prosperous federating unit, Kaira said Balochistan has five per cent population and it gets five per cent from the divisible pool while Punjab is taking just 47 per cent allocation as against 57 per cent population.
He said if poverty is included as a factor for the basis of new mechanism of resource distribution mechanism, then Punjab and the NWFP would be the beneficiaries.
According to a copy of the presentation of Punjab available with The News, per capita development expenditures in Punjab stand at Rs1,531 while the figure for Balochistan is Rs3,590.
Balochistan is spending Rs4,976 per person on law and order where as Punjab is spending just Rs2,576. Punjab in its presentation stressed for distribution formula based on population, but subject to judicious vertical and horizontal resource distribution among the four federating units.
Member (NWEP) Haji Adeel expressed sorrow over the presentation of Punjab and termed the facts and figures shown in the presentation as fictitious, saying the income of the masses living in the NWFP is much less, which is why the poverty incidence in the NWFP is too high.
Adeel disclosed that on the issue of net hydel profit of the NWFP, the experts’ team of his province will hold meeting on Saturday with Wapda officials in the ministry of finance, Q Block.
Finance Secretary Salman Siddique said the federation has projected the future revenue projection on the basis of MEFP (Memorandum of Economic and Financial Policies) that Pakistan has agreed with the International Monetary Fund (IMF).
To a question he said for the current fiscal the volume of federal divisible pool stands at Rs1,270 billion out of which the share of provinces stands at Rs590 billion.
NWFP Finance Minister Humayun Khan said Wapda will brief the province on Saturday over net hydel profit issue in Islamabad.
Member (Balochistan) Dr Gulfraz Khan said per capita service and development cost is too high in Balochistan, which is why poverty in the province has increased manifold. “Now it is badly needed to bring Balochistan at par with other provinces in terms of economic equality.”