ISLAMABAD – The federal government on Tuesday announced to constitute new National Finance Commission (NFC) award by December this year after provincial governments showed serious concerns on the delay of fresh resource-sharing formula between Islamabad and four provincial governments.
“An important meeting for new NFC award has been summoned on September 5 in Lahore,” Finance Minister Ishaq Dar told media after chairing a meeting on bi-annual monitoring report of NFC for July- December 2015.
Sindh CM/Finance Minister Syed Murad Ali Shah, Punjab Finance Minister Ayesha Ghaus, KP’s Finance Minister Syed Muzaffar Said, Secretary Finance Balochistan Akbar Durrani and senior officials of the finance departments of Punjab, Sindh, Balochistan, KP and finance division attended the meeting.
Two provincial governments, Sindh and Khyber Pakhutnkhwa (KP), the other day had protested with federal government for delaying NFC award.
The provinces had demanded the federal government to convene the meeting of much delayed NFC. Therefore, the federal government has accepted the demand of the provincial governments and summoned the meeting on coming Monday (September 5) after a gap of one year and four months.
The 7th NFC award expired on June 30, 2015. The government had extended the 7th award for previous as well as ongoing financial year after failing to formulate new formula. The government had constituted the finance commission on April 24 last year and it held its first meeting on April 28. It had decided to constitute four working groups to undertake thematic studies and submit their recommendations to the commission. However, no more meeting of the commission could be held since then.
Dar informed the media that government had also accepted the provinces’ demand to hold quarterly meeting for monitoring report on (NFC) award instead of bi-annual meetings. Next meeting would be held in October this year. He further said that yesterday’s (Tuesday) meeting was the first bi-annual monitoring report on 7th NFC for July-December 2015.
Speaking on the occasion, Murad Ali Shah said the federal government was making efforts to finalise the award at the earliest. He further said that it was mandatory to constitute new NFC award after five years under Article 160 of the Constitution. The new NFC should be constituted by December this year so that next year’s budget could be based on new resource-sharing formula.
Earlier, the finance minister approved the first bi-annual monitoring report of National Finance Commission for July to December last year. There was no objection from any province on financial figures of the report.
Secretary Finance Dr Waqar Masood Khan briefed the meeting on the data compiled by the NFC Secretariat for the period under review.
The finance secretary briefed the meeting that the total collections through FBR receipts stood at Rs.1,448.79 billion in the 1st half of the 2015-16. Straight transfers to the provinces on account of royalty on natural gas, gas development surcharge, royalty on crude oil, excise duty on natural gas stood at Rs.50.43 billion.
Provincial share in divisible pool taxes was Rs.412.79 billion for Punjab, Rs 195.86 billion for Sindh, Rs.116.64 billion for KP and Rs.72.52 billion for Balochistan. KP and Balochistan were additionally paid Rs.14.02 billion and Rs.5.47 billion respectively on account of war on terror.
Giving details about the distribution the report said, out of the total divisible pool, Punjab received 51.74 percent of funds during the period under review followed by Sindh which received 24.55 percent, Khyber Pakhtunkhwa received 14.62 percent while Balochistan was provided 9.09 percent funds from the divisible pool.
After thorough discussion, the draft report was approved for tabling in both houses of the parliament as well as the provincial assemblies.
The finance minister also gave approval for holding the meeting of the monitoring of NFC award on quarterly basis. The next meeting is expected to be held in October 2016.