KARACHI – The Sindh government wants to collect royalty on the production of oil and gas, but a “19th Amendment” would be needed to the Constitution to ensure this “right” of the provinces, said Sindh Finance Minister during the Sindh Assembly session on Tuesday.
Replying to different supplementary questions furnished by National People’s Paty’s (NPP) Arif Mustafa Jatoi during the question hour, Shah complained that the Federal government passed on incomplete information on royalty amounts to the provinces. He added that the Sindh Finance Department has written to the Federal Petroleum and Finance Ministries to share these.
Responding to another of Jatoi’s questions, the finance minister said that the Provincial Finance Commission (PFC) can alter the formula for distributing funds among districts, but the last PFC Award lapsed in 2010 with the expiration of the Sindh Local Government Ordinance (SLGO)-2001.
A new Award is dependent on the composition of a new local government law, Shah said. Local Government Minister Agha Siraj Durrani added that the new PFC body will be constituted within 90 days of the new legislation.
Shah explained that as per the current formula, funds distribution among districts is based on population (40 percent), service infrastructure (35 percent), development needs (10 percent), area (five percent), and performance (10 percent).
As per the formula, the government is providing Rs10,554.398 million to Karachi, Rs3,203.942 million to Hyderabad, Rs3,111.064 million to Dadu, and Rs3,708.034 million to District Khairpur.
The finance minister said that in the fiscal year 2006-07, 40 percent of the funds were shared on the basis of population, 35 percent on service infrastructure, 15 percent on development needs, and 10 percent as equal sharing. From 2002-03 to 2004-05, the distribution formula was 50 percent on population basis, 17.5 percent on backwardness, 7.5 percent on tax collection, and 25 percent on transitional
