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Karachi

January 12, 2017

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Sindh opposes bid for 7pc federal funds for CPEC, Fata

Sindh opposes bid for 7pc federal funds for CPEC, Fata

Sindh’s chief minister has put up a strong opposition against the proposal of allocating seven per cent funds from the federal divisible pool for security arrangements of projects under the trade corridor and for development of Fata and other parts of the country.

Discussing the National Finance Commission (NFC) with Punjab Finance Minister Dr Aisha Ghaus at the CM House on Wednesday, Murad Ali Shah said the bid was “unconstitutional” and would set a wrong precedent. He suggested that all the provinces of the country resist the proposal.

CM Shah said the federal government’s proposal to allocate three per cent funds for the security of projects under the China-Pakistan Economic Corridor (CPEC), and four per cent for the development of Fata, Gilgit-Baltistan and Kashmir was unreasonable and against the Constitution. “The divisible pool is only for distribution of collected funds among the provinces.”

The chief executive reasoned that Centre had already allocated one per cent from the divisible pool for law and order in Khyber Pakhtunkhwa. “Now it seeks the consent of all the provinces to allocate three per cent for CPEC’s security and four per cent for developing Fata, G-B and Kashmir. This is an unconstitutional demand and cannot be met.”

He said the share of all the four provinces in the divisible pool came to 57.5 per cent and the remaining 42.5 per cent went to the federal administration. He added that the Sindh government had already raised a force of 2,000 former army men to provide security to CPEC’s projects and employees, and also spent Rs300 billion on law and order from 2010-11 to 2015-16.

“The federal government does not bother to share a single penny, and now they are pressing the provinces to give funds from their shares,” he said, and termed the demand “unacceptable”. “I request the Punjab, KP and Balochistan governments to develop consensus and oppose the proposal,” he told Dr Aisha, who assured him that she would support his stance.

CM Shah also said the provincial governments should have the right to collect sales tax on goods and then deposit it with the federal government for onward distribution among the provinces according to their agreed share. “We have prepared the case, and the Punjab government should make a similar case so it could be brought up in the next NFC meeting.” The Punjab minister supported this stance as well.

Shah added that unilateral tax deducted at source (TDS) from the share of the Sindh government was another illegal act.

“The deduction is made purely on presumptions. Before deducting tax at source, Centre should reconcile the figures with the Sindh administration.”

Dr Aisha said the reservations and grievances of the Sindh government were genuine, adding that she would support Shah’s stance on TDS as well.

She assured Shah that the Punjab government’s views on issues he raised were the same.

The CM said he would also bring up these issues with the other provinces.

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