ISLAMABAD - The National Finance Commission, under Finance Minister Shaukat Tarin, concluded its two-day maiden session on Friday upon the formation of two subgroups and noting down grievances of smaller provinces. One group would address the vertical distribution of resources after benchmarking of expenditures, both in the center and the provinces. Federal Finance Secretary Salman Siddique would head this Vertical Sub-Committee and four provincial finance secretaries would be its members. The second subgroup that the NFC formed was the economic and political sub-committee or the Horizontal Sub-Committee under the Federal Finance Minister, which would include all the members of the NFC. This group would be discussing horizontal distribution of resources. Issues including the reframing of the Gas Development Surcharge (GDS), the share of provinces in the General Sales Tax, and additional payment to NWFP on account of war on terror and others would come under the second Sub-Group. Finance Minister Shaukat Tarin, while talking to journalists after the meeting, hoped that the 7th NFC Award would be finalized in October, if not by September 30th, which was the tentative deadline that was given earlier. He said the next meeting of the NFC would be held in Quetta on September 18-19. Both the subgroups are to meet on September 4th in Islamabad. Before the Quetta meeting, the two subgroups are expected to come up with a clear direction, if not a picture, of the new NFC formula, he added. Tarin also hinted at increasing the share of the provinces in the divisible pool. We understand that the existing 45:55 is not appropriate and it should be changed in favour of the provinces, he said. Earlier representatives of the (population-wise) smaller provinces namely Balochistan, Sindh, and NWFP, were heard expressing resentment at the presentation by Punjab Finance Minister Tanvir Ashraf Kaira. During his presentation, he had said that Punjab was earning lowest of the per capita income at Rs 3000, in comparison with NWFPs Rs 4000, Sindhs Rs 4800 and Balochistans Rs 6300, which was the highest of the federating units. According to the Punjab Finance Minister, Mangla Dam is operating in Punjab, therefore net hydel profit be given to the province. The net hydel profit on Ghazi Brotha Dam that amounts to Rs18 billion over the years should also be given to Punjab, he further said. If Punjab is the poorest province as its Finance Minister has tried to prove in his presentation, then what should we expect from this NFC? Balochistan Finance Minister Mir Asif Kurd asked media after the morning session of the second day of the NFC meeting. After this presentation I feel that I should give to Punjab in charity whatever I have got in my pocket, he added in a taunting tone. Kaira, while defending his presentation, which had caused ripples in the session, said, Punjab does not demand anything more but we just wanted to break this myth of the bigger province consuming most of the resources. Kurd and his aide, Dr Gulfraz Ahmed, explained to the media that it was very easy to prove that as per population, Punjab is the poorest province but going by area there is no point of comparison of any province with Balochistan. We have just requested the center and bigger provinces to follow the basic economic principles, including the inverse density of population, he added. Similarly, he said, Gas Development Surcharge is distributed among the provinces in direct proportion to the production of gas from a particular province that needs to be revised according to the current circumstances. In 1960, when this formula for GDS distribution was introduced, Balochistan used to produce 70 per cent of the total gas in the country, which has gone down to 22-23 per cent, he explained. Sindh Chief Minister Syed Qaim Ali Shah, while talking to the media after the meeting, said that poverty in his province, according to the World Bank estimates, was highest, with 40 to 45 per cent of the population living under the poverty line. He said that Sindh has demanded for the new NFC Award to be based on revenue collection and generation in addition to the population. Both NWFP and Balochistan objected to the proposal of basing the Award on revenue collection and generation in addition to population. They have asserted that the provinces generating lesser revenue and having lower population as compared to others should be given resources inversely. The Finance Minister, who chairs the NFC, as taken up front the issue of net hydel profit of the NWFP. Tarin has summoned the Water and Power Development Authority for a meeting with the NWFP representatives here on Saturday to hammer out a solution to the long outstanding issue.