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January 13, 2018



PM Abbasi faces challenge to decide 8th NFC award

ISLAMABAD: Prime Minister Shahid Khaqan Abbasi will need to decide the renewed distribution of resources among the centre and provinces in absence of the finance minister, but the government seems reluctant to indulge in such thorny issues ahead of general elections, economists said on Thursday.

The economists said Prime Minister Abbasi would need to head the meetings to decide the fresh resources distribution formula to present the much-awaited 8th National Finance Commission (NFC) award.

They, however, argued that chances are quite dim for any breakthrough as they said the government doesn’t want to create a controversy over resources sharing ahead of general elections scheduled in mid of this year.

The 7th NFC award expired in 2014/15 after completing its five-year life since 2009. Since then, the award has been extended for interim periods.

Currently, Abbasi holds an additional portfolio of Finance Minister, though he has appointed Advisor to PM on Finance Miftah Ismail as well as Minister of State for Finance Rana Mohammad Afzal to run the affairs of the financial issues.

Kaiser Bengali, who represents Balochistan as non-official NFC’s member, said the premier couldn’t delegate powers to anyone to head the NFC meeting “under the constitutional requirement”.

Bengali recalled that when ex-chief minister Sindh Qaim Ali Shah had assumed the office of Finance Minister Sindh during his tenure he used to attend the meetings on NFC.

Economists do not foresee any possibility of fresh NFC award ahead of general elections. “The incumbent regime will not prefer to open new Pandora Box at this juncture,” an economist said.

Pervez Tahir, former chief economist of Planning Commission said the last NFC award, finalised during the Pakistan Peoples Party-led regime, had transferred increased resources to meet pro-poor expenditures.

“The PRSP- (Poverty Reduction Strategy Paper) related expenditures had gone up from Rs2,300 billion to Rs3,000 billion within five years of NFC Award,” Tahir said, addressing a seminar organised on NFC by Social Policy and Development Centre (SPDC).

The former chief economist said there is stalemate on NFC because the shares of the provinces could not be decreased and yet the federation is using various methods to reduce provincial shares in the federal divisible pool. “So in these circumstances the chances are quite dim for any breakthrough at this juncture,” he added.

Saeed Ahmed, chairman of SPDC said the resources distribution formula to decided share of the centre and provinces is finalised on the basis of projected expenditures of the five-year period instead of resources generation.

Ahmed said the population was not the basis to devise the resource distribution formula. In the 6th NFC award, Punjab got share of 56 percent, “but it actually got 46 percent share on the basis of population”.

SPDC chief said the gas surcharge was distributed at the NFC forum, but it was not the constitutional requirement but it was finalised at NFC forum as a goodwill gesture.

“The resource distribution formula should be linked with efficiency of expenditures as each penny should be linked with outcome based approach,” he said. “The match grants should be attached with efficiency into expenditures for the provinces.”