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November 28, 2016

Ninth National Finance Commission meets today

National

November 28, 2016

Sindh, Balochistan CMs unlikely to attend meeting

ISLAMABAD: The 9th National Finance Commission (NFC), headed by Finance Minister Ishaq Dar, will meet here on Monday (today) to discuss its biannual report for presenting it in the parliament, which is a constitutional requirement, The News has learnt.

Reports of four working groups of the NFC will also come under discussion. The meeting has been summoned at a time when at least two provincial finance ministers – from Sindh and Balochistan – will not be able to attend it. Portfolio of finance in Sindh and Balochistan is held by the chief ministers; Balochistan chief minister is abroad currently and the Sindh CM has his engagements in Karachi.

Punjab Finance Minister Ayesha Ghaus Pasha told The News that two agenda items have been conveyed to the participants: biannual meeting, and presentation regarding NFC working groups. It is premature to talk of the 8th NFC Award, she concluded.

None of the invitees, except for Prof Ibrahim – a private member from Khyber-Pakhtunkhwa – was willing to talk on record. However, they expressed their concerns over calling a meeting at a very short notice. They also complained that even they were not told about the agenda of the meeting.

Prof Ibrahim said “we have been asking the federal government to summon the NFC meeting in order to finalise the 8th NFC Award. Now they called the meeting at a very short notice and didn’t inform us about the agenda of meeting”. He said as a member from KP, he would demand early finalisation of the NFC Award and in this award provincial share in divisible pool should be increased to 80 per cent and the Centre should have 20pc of the total divisible resources. The KP would also demand giving more weightage to poverty for distribution of resources.

Sources claimed that the Sindh CM would not attend the meeting and province’s private member, Salim Mandaviwala, would present a well-prepared case of his province. On the top of it is a demand to allow the provinces to collect general sales tax (GST) on goods and Capital Gain Tax (CGT). Provinces are increasing GST on services, and collection has improved by 300pc, added the sources. He will also demand royalty on oil for the provinces, like in the case of natural gas.

Also, like the KP, Sindh also be give special grant or allocation in annual budget to tackle law and order and terrorism in the province. The KP is being given one per cent to handle terrorism and law and order situation.

The Balochistan finance secretary told The News “we will demand allocation of five per cent of the total CPEC budget to strength infrastructure in Balochistan”. About the NFC award, he said that provincial share should be increased in divisible pool on the basis of its area.

In the current 7th NFC Award, factors other than population had been considered and the critical issue of horizontal distribution was resolved. The credit for this generosity went to the Punjab chief minister and finance minister. Under the existing award, Balochistan's share in the provincial pool had been increased to 9.09 per cent.

After considering special needs of Balochistan and application of multiple indicators, Punjab had been allocated a share of 51.74 per cent, Sindh 24.55 per cent and the NWFP 14.62 per cent. The share of Punjab dropped by 1.27pc, Sindh’s by 0.39pc and the KP’s by 0.26pc.

Presently, the distribution of resources is based on 82pc weightage to population, 10.3pc to poverty, 2.5pc to revenue generation, 2.5pc to revenue collection and 2.7pc to area. The provinces' share in the divisible pool increased from 47.5pc to 56pc in the first year and 57.5pc afterwards.