Use of divisible pool for CPEC unconstitutional: Sindh CM

Published: January 11, 2017
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KARACHI: Sindh Chief Minister Syed Murad Ali Shah has said that the proposal of allocating 7% of funds from the federal divisible pool for security arrangements for CPEC-related projects and for the development of Fata and other areas is unconstitutional.

 

“It will set a wrong precedent, therefore, all the provinces should oppose the proposal collectively,” he said while discussing the National Finance Commission (NFC) award with Punjab Finance Minister Dr Ayesha Ghaus Pasha at the Chief Minister’s House on Wednesday.

Need to capitalise on CPEC-related infrastructure, investments
The federal government has recommended allocation of 3% of the divisible pool of taxes for the China-Pakistan Economic Corridor (CPEC)-related security force and 4% for the development of Federally Administered Tribal Areas (Fata), Gilgit-Baltistan and Kashmir. The centre has sought approval of the provinces in this regard.

 

“The divisible pool is only for the distribution of collected funds amongst provinces,” Shah said.
He pointed out that the federal government had already earmarked 1% of the divisible pool for the maintenance of law and order in Khyber-Pakhtunkhwa.

Security expenses: Centre seeks 7% cut in gross divisible pool
The share of the four provinces in the divisible pool is 57.5% and the remaining 42.5% goes to the federal government. The Sindh government has established a force of 2,000 ex-army men to provide security for the CPEC projects and employees.
The province has also spent Rs300 billion on the maintenance of law and order from 2010-11 to 2015-16.
“I would request the Punjab government, Khyber-Pakhtunkhwa and Balochistan to develop consensus and oppose the proposal,” Shah said.

9th NFC: Experts say no changes expected in resource distribution formula
He emphasised that provincial governments should have the right to collect sales tax on goods and then deposit the same with the federal government for onward distribution among provinces according to their agreed share.
“We have prepared the case and the Punjab government should also make a similar case so that it could be fought in the next NFC meeting,” he said.
The chief minister called the unilateral wealth tax deduction at source from the share of Sindh government another illegal act.
“The deduction is made purely on presumptions. The federal government before making the deduction should reconcile figures with those of the Sindh government,” he suggested.
The Punjab finance minister agreed that the reservations and grievances of the Sindh government were genuine and she would also support the province.
Views of the Punjab government on the issue the Sindh chief minister had raised was the same, she said.

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