Financial autonomy: Smaller provinces keen to get eighth NFC off the ground

Federal govt delaying move, uninterested in giving up revenue to the provinces

Qaiser Butt January 10, 2015
Federal govt delaying move, uninterested in giving up revenue to the provinces. CREATIVE COMMONS


Even as the federal government dithers on constituting the 8th National Finance Commission (NFC), the smaller provincial governments have already begun their preparations for negotiations and are pressing Islamabad to start the process as soon as possible.

Khyber-Pakhtunkhwa and Balochistan in particular have already nominated their representatives to the NFC, with Peshawar appointing former senator Professor Muhammad Ibrahim Khan of the Jamaat-e-Islami and Quetta appointing economist Kaiser Bengali.

There is some disagreement about whether the 7th NFC award is still in effect or has already expired. Shumail Ahmad Butt, a constitutional consultant working for the Khyber-Pakhtunkhwa government believes that it expired on December 29, 2014, exactly five years after it was signed in 2009. However, Mir Khalid Langove, finance adviser to the Balochistan chief minister, believes that it expires on June 30, 2015, five years after it went into effect on July 1, 2010.

“Constituting the next NFC is a constitutional requirement since the current NFC award is set to expire at the end of fiscal 2015,” said Langove.

The Khyber-Pakhtunkhwa government, led by the Pakistan Tehreek-e-Insaf (PTI) appears to have a somewhat more confrontational attitude about the NFC. “It appears that the federal government is not interested in fulfilingl its constitutional obligation,” Butt told The Express Tribune.

Balochistan, meanwhile, appeared to adopt a more conciliatory tone. “’I don’t think that the federal government has already decided to skip its constitutional obligations,” said Bengali. “However, Islamabad has very little time at its disposal for a decision on the commission.”

Bengali, a University of Karachi-trained economist, was the nominee for Sindh in the 7th NFC Award and widely regarded as responsible for helping Sindh get a favourable deal during the negotiations in 2009. It appears that Balochistan is now interested in his talents to get them something similarly advantageous. He currently heads the Balochistan chief minister’s Policy Reform Unit.

Bengali appeared optimistic about the prospects of the 8th NFC, even though there are only six months left to the expiration of the last one. “The 7th NFC finalised its task within five months, despite enormous fundamental difficulties it was faced with in 2009,” he said. “Those vital difficulties have now been resolved and it would not be problematic for the 8th commission to finalise its recommendation within next six months if formed now.”

For its part, Islamabad appears to be employing delaying tactics. Peshawar’s nominee has yet to be confirmed by the federal government. Even Bengali’s appointment was held up for months under the false pretext that he could not simultaneously serve two provinces, even though only Balochistan nominated him. Bengali then clarified that he last served Sindh three years ago and is now representing only Quetta.

Officials at the finance ministry in Islamabad barely conceal their loathing of the 7th NFC Award, since it took away significant spending power from them and gave it to the provinces. “The ministry has been delaying the issue because it fears that the financial demands the provinces are expected to make during the 8th NFC will result in financial difficulties for itself,” said one ministry official on the condition of anonymity. “It is the government’s firm opinion in that the provinces have already gained much more than their actual needs in the 7th award. That is why the formation of the commission and the confirmation of Balochistan and Khyber-Pakhtunkhwa’s nominees is being delayed.”

Asad Umar, the PTI’s leading policy wonk, said that the NFC should have been constituted in July 2014. “I don’t know why the government is delaying it,” he told The Express Tribune. “It has become the federal government’s habit to run the country’s affairs on an ad hoc basis.”

Umar agreed that the provinces had gotten more funds than it expected or knew how to spend.

Published in The Express Tribune, January 10th, 2015.



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