Post-2015: Provinces may foot part of defence bill
The proposal will be discussed once talks for 8th NFC Award formally kick off.
The proposal will be discussed once talks for 8th NFC Award formally kick off. PHOTO: REUTERS
ISLAMABAD:
As the defence budget continues to gobble up almost one-third of the total federal budget, federal authorities have begun crafting a proposal to make the provinces foot part of the bill for defence spending from 2015 onwards.
The proposal, which is currently in its initial stages, will be discussed once talks for the 8th National Finance Commission (NFC) Award formally kick off, a source in the finance ministry told The Express Tribune.
Under the Constitution, the defence budget falls under the federal government and for that reason all defence-related expenses are borne by the federal government.
The accumulative defence spending for the current fiscal year has been estimated at Rs880 billion or roughly 30% of the Rs3 trillion federal budget, according to the budget strategy paper. The amount includes expenses on army pensions. Defence spending is expected to increase to Rs970 billion in the next fiscal year. The federal government’s financial constraints after the implementation of 7th NFC Award, which is in its third year of its five-year life span, lies at the heart of the proposal.
In the 7th NFC Award, the share of the provinces in the federal divisible pool had been increased to 57.5% — an increase of almost 10% over the previous award to the provinces, which took political parties 14 years to agree on.
According to sources, the finance ministry has embarked upon a mission to find new ways in which the provinces can share some federal responsibilities, as the Constitution does not allow a reduction in the provinces’ share in the divisible pool. Even in the next NFC Award, the provincial share has been guaranteed at minimum 57.5%.
The Planning Commission has advised the finance ministry to take up the defence fee proposal along with some other key outstanding issues at the appropriate forum, which is the NFC.
Published in The Express Tribune, March 24th, 2013.
As the defence budget continues to gobble up almost one-third of the total federal budget, federal authorities have begun crafting a proposal to make the provinces foot part of the bill for defence spending from 2015 onwards.
The proposal, which is currently in its initial stages, will be discussed once talks for the 8th National Finance Commission (NFC) Award formally kick off, a source in the finance ministry told The Express Tribune.
Under the Constitution, the defence budget falls under the federal government and for that reason all defence-related expenses are borne by the federal government.
The accumulative defence spending for the current fiscal year has been estimated at Rs880 billion or roughly 30% of the Rs3 trillion federal budget, according to the budget strategy paper. The amount includes expenses on army pensions. Defence spending is expected to increase to Rs970 billion in the next fiscal year. The federal government’s financial constraints after the implementation of 7th NFC Award, which is in its third year of its five-year life span, lies at the heart of the proposal.
In the 7th NFC Award, the share of the provinces in the federal divisible pool had been increased to 57.5% — an increase of almost 10% over the previous award to the provinces, which took political parties 14 years to agree on.
According to sources, the finance ministry has embarked upon a mission to find new ways in which the provinces can share some federal responsibilities, as the Constitution does not allow a reduction in the provinces’ share in the divisible pool. Even in the next NFC Award, the provincial share has been guaranteed at minimum 57.5%.
The Planning Commission has advised the finance ministry to take up the defence fee proposal along with some other key outstanding issues at the appropriate forum, which is the NFC.
Published in The Express Tribune, March 24th, 2013.