Division of pool money

02 Jun, 2004

I have no hesitation in accepting the fact that I am not an expert on national financial matters but if the NFC problem is what I understand it to be then I have a simple solution of the same.
According to my limited knowledge the central money pool has to be divided amongst the four provinces on an equitable basis acceptable to all the four provinces.
The problem arises because the provinces demand different basis for this division; Punjab wants it on population basis, Balochistan on area basis and Frontier and Sindh on revenue bases.
If my assumption is correct then the solution is that the pool money should be split in three equal parts and each portion should then be divided between the four provinces in proportion of (1) population, (2) area and (3) revenue.
In case the demands of Sindh and Frontier province are different then the pool money will have to be divided in four equal proportions and then allocated on the basis of population, area, revenue and whatever is the basis of Frontier's demand.
If the above formula solves the problem, I shall feel amply rewarded.

Read Comments