NFC Award expectations

It is a good omen that the 11th NFC Commission has been constituted. One hopes it will be able to come up with a consensual 8th Award, after a hiatus of almost 15 years, by eloquently taking into account the new dynamics of economic crunch, marginalisation of under-developed segments and the GDP-population ratio in a more rational manner. Reports say that the Centre is already proposing a cut in provinces share from the divisible pool, by at least 10%, as it struggles to make ends meet, and contemplates demanding allocations for Islamabad Capital Territory, Gilgit-Baltistan and AJK that fall within its purview.

The federation that sits almost empty handed after doling out revenue to the provinces now wants the federal taxes to be linked with improvements in the education, health, population management and climate indicators. To what extent the coalition government at the Centre will be able to convince their own respective political dispensations in three of the provinces is anybody's guess.

The NFC Award has been a bone of contention between the Centre and province as the former is not happy with the prevalent formula of distribution of resources. With 57.5% from the federal divisible pool going to provinces, the Centre remains in the muddy waters of public debt. That is why it is hoped that the new commission will make some valuable input on grants-in-aid and scrutinise the borrowing powers of both the federal government and the provinces. It will be more ordained if the funds are linked with onward allocations for the local governments, and the pyramid of population as the sole criterion is shelved.

Pakistan, with its soaring debt and population, is in need of a new financial contract. The NFC must call for reforms, de-politicisation of census and a shift towards a performance-based resource distribution formula based on GNP and tax collection — and not population. Last but not least, the appointment of a non-political NFC Commission composed of eminent economists, jurists and impeccable civil servants could go a long way in pulling society out of the abyss of poverty and degeneration.