Govt reschedules NFC meeting after five-month break

MoF had earlier postponed the NFC meeting indefinitely on legal grounds after a technocrat was appointed as adviser to PM on finance

ISLAMABAD: After a break of around five months, the Ministry of Finance has decided to reschedule the National Finance Commission (NFC) meeting, which would deliberate on the next NFC Award.

According to the ministry sources, a meeting to discuss issues related to the next NFC Award was held recently at the finance ministry wherein it was decided that all provinces would be asked to resume the meetings of NFC sub-committees formed previously.

Former finance minister Asad Umar, while chairing the inaugural meeting of 9th NFC, had constituted various sub-committees to deliberate the issue.

“Taking the lead, the ministry will now hold a meeting of the central committee of NFC by the end of this month,” sources said. “The six sub-committees/groups will make proposals and recommendations for the next award.”

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The committees were assigned the task of giving proposals/recommendations on macroeconomic framework and benchmarking (to be coordinated by Punjab); vertical distribution of the divisible pool taxes between federation and provinces, including the needs of AJ&K and GB (to be coordinated by the federal government), horizontal distribution of divisible pool taxes among provinces (to be coordinated by Balochistan), straight transfers (to be coordinated by Balochistan), measures required for simplification of  tax procedures and payment systems to facilitate businesses (to be coordinated by Sindh) and integration/merger of FATA in Khyber Pakhtunkhwa (to be coordinated by KP).

Earlier, the ministry had postponed the NFC meetings indefinitely on legal grounds after a technocrat was appointed as the adviser to prime minister on finance and revenue.

The ministry, through a letter, had informed the provinces that “since Adviser to PM on Finance Dr Hafeez Shaikh cannot chair the NFC meetings until he is promoted as a federal minister, the meeting of NFC has been postponed for an indefinite duration”.

Meanwhile, the ministry had also sought the opinion from the Law Division regarding the legitimacy of the adviser. In case of objection by the provinces, the finance ministry has to wait for promotion of the advisor to the post of federal minister to convene the next NFC meeting.

According to sources, the ministry is yet to receive a reply from the Ministry of Law regarding legal hindrance in chairing of the NFC by the adviser.

The last meeting, which was scheduled for April 29, 2019, was not held owing to the absence of the then finance minister. As per rules, the finance ministers from federal and provincial governments are required to attend the NFC meeting. In case of absence of the finance ministers, the prime minister and the provincial chief ministers can attend the NFC meeting.

Soon after the appointment of Hafeez Shaikh as head of the finance ministry, officials at the finance ministry had formally started assessing the legal options to legitimise the adviser’s role as the NFC head. The department concerned had suggested the premier to chair the next meeting or postpone it till the constitutional obligations are met.

It may be recalled that in order to empower the adviser, Prime Minister Imran Khan had appointed Dr Abdul Hafeez Shaikh as the chairman of Economic Coordination Committee (ECC), chairman of the Cabinet Committee on Energy (CCoE) and chairman of the Cabinet Committee on Privatization (CCoP).

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Ghulam Abbas
The writer is a member of the staff at the Islamabad Bureau. He can be reached at [email protected]
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