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9th NFC to focus on 5 key areas through constituting sub-groups

9th NFC to focus on 5 key areas through constituting sub-groups

ISLAMABAD: The 9th National Finance Commission has agreed to undertake detailed background work in five key areas through constituting sub-groups, including resource mobilisation at federal and provincial level.

Other areas included the devolved versus integrated tax structure, evolution of tax collection framework in Pakistan, allocation efficiency and expenditures analysis at the federal and provincial level and rationalisation of subsidies and grants.

The NFC met here with Finance Minister Ishaq Dar in the chair and asked the sub-groups to complete their work in the light of which further work of commission will proceed.

Besides Dr. Abdul Malik Baloch, Chief Minister, Balochistan and Finance Ministers of Punjab, Sindh and Khyber Pakhtunkhwa, Prof. Muhammad Ibrahim Khan (Khyber Pakhtunkhwa), Dr. Kaiser Bengali (Balochistan) and Dr. Aisha Ghaus Pasha (Punjab), Federal Finance Secretary, Finance Secretaries of the Provinces and officials of NFC Secretariat were present in the meeting.

The participants were given a detailed presentation on the constitutional status, history and evolution of the NFCs. The meeting was informed that the NFCs constituted in 1974, 1990, 1995 and 2005 had presented their recommendations, however, the NFCs constituted in 1980, 1985 and 2000 could not make recommendations for an Award. The 8th NFC set up in 2010 during its tenure monitored implementation of the 7th NFC Award.

A brief assessment of the 7th NFC Award was also placed before the Commission. The Commission was informed that during the 7th NFC period, transfer of resources from Federation to provinces increased substantially.

The transfer of resources from federation to provinces was visible from the fact that against Rs 677 billion transferred to Provinces in FY 2009-10, during the current financial year, provinces will be receiving close to Rs.1600 billion.

As a result the fiscal position of provinces had been strengthened compared to the Federal Government. The Commission was also informed that the 7th NFC Award projected increase in overall revenues to 15% of GDP, but in fact this appeared to have remained stagnant if not decreased.

As per notification, the ten member commission is headed by the Finance Minister Ishaq Dar as the chairman while other members include all four provincial finance ministers and others including Dr. Aisha Ghaus Pasha to represent Punjab, Senator Salim Mandviwala to represent Sindh, Muhammad Ibrahim Khan to represent Khyber Pukhtunkhwa and Kaiser Bengali to represent Balochistan government while Federal Secretary Finance Dr. Waqar Masood are member of the commission as official expert. The Finance Division is meant to provide secretariat support to the commission as per Rules of the Business, 1973.