NFC issues

After the formation of the 10th National Finance Commission by the president of Pakistan earlier in May, there have been multiple controversies regarding its membership and the terms of reference (ToR). The latest is the petition filed in the Islamabad High Court by a PML-N leader. The issue raised in it is that according to the 1973 constitution, elected representatives should be running the affairs of the country including all economic matters – whereas in the recently formed NFC the finance adviser to the prime minister has been assigned to lead the commission. Since the court has summoned the respondents and sought replies, the case is sub judice and we cannot comment on this aspect of the matter, but there are certain issues that need highlighting. The first is the debate on the constitutional and financial powers of the federation and its units according to the 18th Amendment approved unanimously by parliament in 2010.

The 10th NFC should have been strictly in accordance with the constitutional obligations of the federal government and should not have overstepped in a domain not falling under its jurisdiction. It appears that the architects of the new commission did not take proper cognizance of the sensitivity of this matter. The NFC primarily has to do with sharing of the federal divisible resources between the centre and the provinces; anything going beyond this mandate was likely to be challenged by not only provincial governments but also questioned by constitutional and economic experts in the country. The eleven-member commission has been given ToRs that is beyond the pale of its mandate per Article 160 of the constitution. Secondly, the authorization given by the president to the advisor of the prime minister on finance and revenue to chair meetings of the NFC in the absence of the federal finance minister is highly contentious.

Constitutionally, there appears to be no room for this. The inclusion of the four provincial finance ministers is an ex-officio matter, but the nomination of four non-statutory members representing the provinces also created controversy. Even if the Balochistan and Khyber Pakhtunkhwa governments had agreed to the nominations of persons belonging to other provinces, such members should ideally have been experts in economics and finance to play a productive role in the discussions. Irrespective of who represents whom, the ToRs will be a major concern for all provinces, and a strictly constitutional way forward is called for so that a mutually beneficial 10th NFC Award is concluded.