NFC award: Punjab govt asked to nominate member

Says commission is incomplete, in no position to convene meeting.

PESHAWAR:

The Khyber-Pakhtunkhwa government has asked the Punjab government to nominate its non-statutory member to complete the National Finance Commission (NFC).

Insiders familiar with the matter told The Express Tribune the request has been made because the commission is incomplete and is in no position to convene its own meeting.

Speaking to The Express Tribune after a meeting at the Civil Secretariat, both Minister for Finance Muzaffar Said and NFC non-statutory member Mohammad Ibrahim Khan said not a single meeting of the commission has been held for the past six months as it is incomplete.

“The main reason why the commission is incomplete is because the Punjab government has not nominated its new non-statutory member,” Mohammad Ibrahim said. “Meanwhile, its former member MPA Dr Aisha Ghaus Pasha has become the finance minister of Punjab and her seat has fallen vacant.”



The new NFC is being chaired by Federal Minister for Finance Ishaq Dar and comprises four provincial finance ministers and four non-statutory members. Sindh has appointed Saleem Mandviwala as its non-statutory member. On the other hand, K-P has appointed Professor Mohammad Ibrahim Khan while Balochistan has selected Dr Qaiser Bengali as its non-statutory member. However, the slot for a non-statutory member from the Punjab government remains empty.

According to Ibrahim, once the new member is nominated by Punjab, President Mamnoon Hussain will have to approve the selection. “Once approval has been sought, the commission will be complete and will be able to meet,” he said. “The Punjab government should complete this job without any further delay as the 7th NFC award expired on June 30, 2015 but the government extended it till June 30, 2016.”

At this critical juncture, the K-P government has voiced dissatisfaction over the extension of the 7th NFC award, saying the federal government should have consulted the provinces in this regard. The matter was raised during a meeting between representatives of the Sindh and K-P governments on August 17.

Adding taxes

The K-P government also plans to convene an all-parties conference to discuss the formula of revenue distribution between provinces and the federal government for the 9th NFC award.

Insiders told The Express Tribune the provincial government wants to incorporate excise duty and customs duty in the 9th NFC award.

“We want all those taxes to be added into the official notification which were promised in the 7th NFC award’s presidential order,” said the finance minister. “The non-provincial units – Gilgit-Baltistan and Fata – should be removed from the NFC award and the provinces will have no objections if the federal government gives these units a large portion of its own share.” According to the finance minister, they also want to include petroleum development levy and gas infrastructure developmental cess in the 9th NFC Award.

“While making changes to the official notification, net hydel profit should be uncapped and arrears should be immediately paid to the province,” he said. “However, in light of the 18th Constitutional Amendment, federal excise duty should be imposed on the production of crude oil and should be given to the provinces.” The finance minister said the provinces share should be raised to 80% as they have more responsibilities after the 18th Constitutional Amendment. He also urged Islamabad to increase the 1% share allotted to K-P to tackle militancy to 5%.

Budget deficit

The provincial budget’s reliance on the federal component is immense. The pending Rs17 billion along with arrears from the net profit from hydel power generation has resulted in a budget deficit of Rs68 million.

While the recent floods and the earthquake has negatively impacted the economy, the first-quarter utilisation of the ADP is 5.8% of Rs174 billion.

Published in The Express Tribune, November 12^th, 2015.