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| President signs 7th NFC award
F.P. Report |
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| ISLAMABAD: President Asif Ali Zardari on Tuesday inked the historic 7th NFC award marking a big step forward towards strengthening of the federation.
Terming the agreement “a historic achievement” of the present political government, the President said “It is a victory for democracy, political parties and all provinces ... and success of the policy of Reconciliation.”
The NFC award was agreed upon by the four provinces at a ceremony at Gwadar on Dec 30 after a gap of 19 years and would come into effect from the next financial year.
The NFC is an agreement by all the federating units over the distribution of financial resources among the provinces of Pakistan by the federal government on annual basis.
The President signed the final document of the award at an impressive ceremony attended by Prime Minister Syed Yousaf Raza Gilani and Parliamentarians from four provinces here at the President House.
The President said, “I feel democracy has taken a leap. We are trying to make a new Pakistan by adhering to the spirit and vision of Mohtarma Benazir Bhutto.”
He said the signing of the NFC award was a proud moment for the people and the nation. The President said the nation will soon hear good news regarding the Constitutional Reforms by the end of the month.
“Democracy that returned to the country some time back, has demonstrated its strength. Lets give it time to grow, give people of Pakistan a chance to grow and they will prove a productive part of the global society,” he added.
The President appreciated role of people of NWFP who took strangers in their house and protected them from extremists and militants.
He said some sections of society are misguided but vowed to take the country forward under guidance of Shaheed Mohtarma Benazir Bhutto.
He thanked the coalition partners and the Punjab government and promised to provinces that they are not short of will and by end of this month, the nation will hear another good news.
The President congratulated the Prime Minister, the Chief Ministers of all provinces, the Finance Ministry and all members of the NFC and complimented the entire nation for the historic achievement.
Under the new formula the Federation and the provinces of Punjab, Sindh and NWFP accepted the special needs of Baluchistan and agreed to provide Baluchistan Rupees 83 billion (9.09 %) of the provincial pool in the first year of the award.
The President said the signing shows that political parties and democracy were capable of achieving great things and said it was a fine example of national unity.
“It shows that given political will the issue of trust deficit can be addressed.”
He said the federal government willingly gave up its share to increase the share of the provinces in the divisible pool and also pointed that the largest province showed great flexibility and accommodation to arrive at a consensus.
Prime Minister Syed Yusuf Raza Gilani said the National Finance Commission (NFC) award will reduce the trust deficit between the federation and provinces and among the provinces.
Addressing the signing ceremony at the President House, he termed the real dividend of democracy, where the political leadership has shown utmost consideration and maturity in arriving at this award.
He congratulated the nation on this historic occasion of the signing ceremony and said the democratically elected government soon after coming into power reconstituted the 7th National Finance Commission (NFC).
The National Finance Commission after meeting for six times has achieved this great task and its recommendations were signed on 30 December, 2009 at Gwadar in a ceremony presided over the Prime Minister.
He said the long outstanding issues like adoption of multiple criteria for the distribution of resources, payment of net hydel profit (NHP) to NWFP and Punjab, the issue of Distribution of Gas Development Surcharge (GDS) and imposition of GST on services were resolved amicably.
The federation displayed its large-heartedness in assigning 56-57.5 % of divisible pool to the provinces, and has given an unprecedented autonomy to the provinces for their economic development, he added.
He congratulated the President, former Finance Minister, Federal Ministers, Governors, Chief Ministers, Finance Ministers of the four Provinces and their teams on this historic achievement which will not only ensure fair and equitable distribution of national resources, removing regional disparities, building underdeveloped areas and making Pakistan stronger.
With the signing of the Order today, he said, its implementation from the next financial year will begin and its fruits will start reaching to people at large bring economic prosperity, improving living condition and reducing poverty.
The Prime Minister underlined the need for provinces to build their capacity to be able to play a more dominant role in development.
As a result of the NFC Award, he informed, the federal government will revisit its policies for both current and development expenditures and to maintain sound financial discipline.
The NFC Award also contains certain advisory nature recommendations which can be implemented separately through legislation or administrative measures, he added.
The Prime Minister said the recommendations are essential component to the success of the main award.
He urged the federal and provincial authorities to initiate necessary legal and administrative steps to ensure implementation.
He said it is a landmark achievement, which embarks the beginning of a new era of development in Pakistan.
Under the NFC population will get 82 percent poverty 10.3 percent, revenue collection 5 percent (2.5 percent revenue generation, 2.5 percent revenue collection) while the area will get 2.7 percent weightage.
Under the award issues like; payment of Net Hydel Profit to NWFP, distribution of gas development surcharge (GDS) and imposition of GST on services, have been resolved and will bring the federating units closer and remove the trust deficit.
In the NFC the NWFP will get Rs 110 billion towards its share in net hydel profits and Rs.10 billion has already been paid in the current financial year, while Rs.25 billion per year will be paid during the next four years.
Special needs of Balochistan have been recognized and accepted and Rs.83 billion will be given to the province from the provincial share in the divisible pool in the first year of the Award.
The NFC also resolves the issue of gas distribution surcharge (GDS) through a revised formula. The GDS due to Balochistan Government with effect from 2002 will be worked out on the basis of revised formula and paid by the federal government to the province.
The Federal Government has agreed to pay the arrears of GDS prior to 1991 and involves an amount of Rs.120 billion which will be paid in 12 years.
The share of the provinces in the divisible pool has been enhanced to over 56 % and the multiple criteria adopted for distribution of the divisible pool now gives weightage to factors other than population also.
The award will take into consideration factors like poverty, revenue collection and inverse population density have also been taken into account in addition to population.
President Zardari gave assent to the Awards, only four of which have been announced in the last 40 years, of which two awards; the 1974 Award and the current 2009 Award have been announced by the People’s Party Governments.
Under the new NFC award the provincial share of the divisible pool would increase from 47.5 percent to 56 percent in the first year of NFC and 57.5 percent in the remaining years of the Award.
After considering special needs of Balochistan and application of the multiple indicators, Punjab province would get 51.74 percent, Sindh 24.55 percent, NWFP 14.62 percent and Balochistan 9.09 percent.
Punjab has given up 1.27 percent, Sindh 0.39 percent and NWFP 0.26 percent, while Balochistan has gained. |
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