NFC meeting expected this month as provinces finally send nominations

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ISLAMABAD: The meeting of National Finance Commission (NFC), which would decide about the next NFC award, is expected this month as the provinces have finally sent their nominations for reconstitution of the commission.

The Ministry of Finance, soon after receiving the nominations from Sindh and Balochistan, which were reluctant to send their nominations, has forwarded the summary to the prime minister for subsequent approval from the president for the reconstitution of the 9th NFC.

“Since the nominations from all provinces for their non-statutory members of the commission have been received, the meeting of next NFC is likely to be held this month,” said an official at the Ministry of Finance. The reconstituted 9th NFC would be required to give 8th NFC award for five years.

The nomination of non-statutory members from provinces was pending for the last three months ever since the finance ministry first requested the provinces to nominate new members for the commission. Despite repeated letters by the ministry, Sindh, Balochistan and Punjab were not sending their nominations.

Finance Minister Asad Umar had been asking the provincial governments since Sept 3 to send their nominations to complete the NFC, as the centre was struggling to finalise an economic package with the International Monetary Fund (IMF). The federal government had to give a clear line about financial arrangements for tribal districts being merged with KP and also about financing requirements of Gilgit-Baltistan and Azad Kashmir.

“The finance ministry had sent a letter to the Ministry of Law, seeking its opinion on reconstitution of NFC without nominations from a couple of provinces. However, both the law ministry and the prime minister objected the move, saying that the law/constitution does not allow reconstitution of NFC without agreement and nominations from all provinces,” said sources at the finance ministry.

After rejection from law division and the PM’s office, the finance ministry had again approached the provinces for the nomination of members and finally, the provinces agreed to participate in the reconstitution process, they added.

According to sources, Khyber Pakhtunkhwa was the only province that had responded early to the ministry by nominating Musharraf Rasool as their private member to the commission.

Sindh has nominated Asad Syed for the position while Balochistan has nominated former finance secretary Mahfooz Ali Khan. Punjab has sent Anwar Ahmad’s nomination as a non-statutory member of the most populous province.

Sindh, Balochistan and Punjab were reluctant to send their nominations as they did not want to allow an increase in the share of the centre. The federal government needed more allocations to meet the expenditure of war on terror, security, capital, tribal areas, GB and Azad Kashmir.

The provinces were reluctant to share more money from the divisible pool with the centre and the armed forces. There was also a demand from IMF to rebalance the transfer of a larger chunk of divisible pool resources to the provinces under the 7th NFC Award.

Although the issue related to the reconstitution of 9th NFC has almost been resolved, but challenges pertaining to the 8th NFC Award still exist, as the government has yet not issued formal notification of the results of the National Population Census due to concerns from various stakeholders, particularly about Karachi.

Besides, the merger of FATA into KP and subsequent addition of about five million population from the tribal region to KP has also created challenges to the NFC.

As required under Clause (1) of Article 160 of the Constitution, the 9th NFC was constituted on April 24, 2015. Since new governments are in place both at federal and provincial levels after the 2018 general elections, reconfirmation of the non-statutory members from the provinces was necessary. The five-year constitutional term of 9th NFC is to expire in June 2020. Federal and provincial finance ministers are the statutory members of the NFC. It is customary to include one non-statutory member from each province.

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