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d not make any development regarding the diversification in the revenue sharing mechanism. The sole criteria for revenue sharing among provinces remained to be population. Disagreements among provinces hindered the development in the resource sharing criteria.

 

However, if we look at the positive side, this award considerably expanded the volume of provincial share in the revenues collected by the Federal government by around 18 percent as compared to 1974 award. This was mainly due to the addition of excise duty on certain items in the divisible pool. The 1991 award was a step forward to fiscal decentralization and provincial autonomy in the country. The 1973 constitution acknowledged the right of provinces to get royalty on natural resources on the basis of collection by each province. Royalty on gas and crude oil, development surcharge on gas, and profits from hydro-electricity were relocated to provinces in the form of straight transfers. As a result, the transfers to provinces increased from 28 percent (Rs. 39 billions) to 45 percent (Rs. 64 billion) of federal tax revenue. The share of each province under this award is given in the table below.

 

Provincial share didn’t have any changes because population was still the sole criteria for revenue distribution and no census was held since 1981. However, the volume of provincial share increased due to the inclusion of new taxes in the divisible pool. In addition to this, special grants were also provided to provinces to meet their developmental needs. The amount of these grants is illustrated in table 4.

 

However there was an increase in the flow of funds to the Provincial governments, provinces were advised to generate their own funds, but the autonomy and funds generating capacity were not sufficient as needed.

 

Fifth NFC Award 1996

 

The 5th NFC award was announced in late 1996 by the care-taker government of that time. This award included all the federal taxes in the divisible pool. Which comprise: income tax, sales tax, capital value tax, wealth tax, excise duties (except the excise duty on gas charged at wellhead) and any other tax collected by federal government. Royalty on crude oil and development surcharge on gas were also relocated to provinces in the form of straight transfers. The incentive of matching grants was also given to the provinces but up to a certain limit; only if provinces exceeded their revenue target of 14.2 percent they would get matching grants. However, numerous objections have been made by the members of parliament elected to the provincial and federal governments following the 1997 general elections.

 

With the expansion of federal divisible pool, the federal-provincial ratio in this award changed radically. Earlier it was 20 percent for federal government and 80 percent for provinces. In this award, the ratios were changed to 62.5 percent for federal gov本论文由英语论文网提供整理，提供论文代写，英语论文代写，代写论文，代写英语论文，代写留学生论文，代写英文论文，留学生论文代写相关核心关键词搜索。