ISLAMABAD: The process to reconstitute the 9th National Finance Commission (NFC) award has been commenced by the federal government as the finance ministry eyes taking a slice of revenue from the provinces.
Letters written by the Federal Finance Minister Asad Umar have been forwarded to all four provincial chief ministers regarding the reconstitution of the 9th NFC, said the Ministry of Finance on Wednesday.
The letters highlighted the necessity of re-confirmation of non-statutory members from the provinces in wake of new governments being in place at the provincial and federal level, reports Express Tribune.
Mr Umar requested the chief ministers to either reconfirm the previously nominated member or proclaim changes in the nomination allowing the federal government to notify the 9th NFC and commence discussions of the commission.
The federal finance minister presides over the NFC and it needs to be constituted not exceeding five years under Clause (1) of Article 160 of the Constitution.
The provisional and federal finance ministers are statutory members of the NFC and every provincial government can appoint one non-statutory member to it.
And the previous government had constituted the 9th NFC for ascertaining of the 8th NFC award and it held a few meetings till the end of November 2016.
After that, no meetings were held and 9th NFC remained undecided.
Senate Deputy Chairman Saleem Mandviwalla was the technical member from Sindh, Dr Ali Cheema from Punjab, Dr Kaiser Bengali from Balochistan and Professor Ibrahim was representing Khyber-Pakhtunkhwa (KP).
Presently, the federal government receives 42.5 percent of the divisible pool and provinces get the rest. In 2010, the 7th NFC award was commissioned, which raised the provinces share to 57.5 of the total divisible pool.
As rising expenditures due to interest payments and defence bite in, the finance ministry is hawking at the share of provinces to decrease its budget deficit, which touched a record Rs2.26 trillion in FY18.
Also, the interim government had recommended a new procedure for resource allocation under the NFC award.
Former interim finance minister Dr Shamshad Akhtar had suggested decreasing the gross cumulative share of all provinces from 57.5 percent to 49.3 percent of the divisible pool.
Furthermore, the interim government proposed decreasing the divisible pool by 3 percent for maintaining security expenses, 2.2 percent for Benazir Income Support Programme (BISP) and 3 percent for special areas.
