Distribution of funds under NFC Award: Federal government says seeks to improve mechanism

ISLAMABAD: The federal cabinet on Tuesday held a discussion, subsequent to a presentation on the National Finance Commission (NFC) award by the Finance Ministry over a merits and demerits of the formula for distribution of resources from the divisible pool, and noted that the provinces, instead of increasing their revenue, have been completely relying on resources from the NFC.

Speaking to media persons at a post-cabinet meeting press conference, federal information minister Shibli Faraz also said "on top of that there is absence of any mechanism as how this money would be utilised by the provinces for the benefit of people to provide them clean drinking water, healthcare, etcetera".

The minister said after the passage of the 18th Constitutional Amendment some issues have emerged whose resolution was absolutely necessary. Faraz also said that Punjab's share in the NFC in fiscal year 2020-21 stood at Rs1.441 trillion but its tax collection was Rs306 billion, Sindh's share in NFC stood at Rs764 billion while its own tax collection was Rs314 billion.

The KP's government share in NFC estimated at Rs602 billion while its own revenue mobilization was Rs50 billion and likewise Balochistan's share stood at Rs282 billion but province's own tax collection was a mere Rs51 billion.

The government firmly believes that there should be a mechanism and accountability so that funds are properly utilised, the minister said. The minister also referred to former chief minister Punjab and stated that he spent all the money only on one city, and consequently rural areas of the province remained under-developed.

The minister said the federal government also extends funds to other provinces against over and above their share in the NFC, which leaving little for itself (the federal government) for debt servicing and other expenditure.

When the minister was asked whether the NFC was the domain of the federal cabinet and an NFC commission meeting should be convened for deliberation of these matters, the minister insisted that the federal cabinet can discuss the "shortcoming" of the NFC award.

"We should discuss these issues in the cabinet and the parliament with the objective to benefiting the entire country," he added.

The minister said the meeting also discussed Prime Minister's relief funds and was informed that Rs4.886 billion has been received.

"We are developing data that would be used for providing targeted subsidy, he said, and added that as many restaurants have been closed due to Covid-19, the cabinet decided to allow open space to people to sell their goods.

He said another important agenda came under discussion was the inquiry report of the commission constituted by the prime minister to determine after a thorough investigation the factors behind the petroleum crisis during the Covid outbreak whether incompetence, conflict of interest or any other reason was behind the "crises".

The cabinet constituted a three-member committee headed by Minister for Planning Asad Umar to suggest recommendations after going through the report. The committee would submit its recommendations to the next meeting of the federal cabinet, added the minister.

Federal ministers Shafqat Mehmood and Shireen Mazari have been included in the committee as members. Some ministers have reportedly voiced their concerns with questions about the role of relevant ministries had been doing when the crises erupted, and the action taken, if any, against the oil refineries identified by the inquiry commission.

According to him, Imran and Ali Hamdani have been appointed DG SSGCL and MD SNGPL, respectively, on contracts for a period of three years. He said the cabinet approved publication of advertisement for appointments of CEOs of DISCOs. The cabinet also approved appointment of Lieutenant Akhtar Nawaz as chairman of the NDMA.

On political issues, he said the Pakistan Democratic Movement (PDM) rally for which a great hype was created remained "unsuccessful", and now they are blaming each other.

"On an unpractical agenda," their differences have emerged, he said, and added, "we condemn their threats to the media because they want elections and courts verdicts of their choice, so they want media to show what they want."

Copyright Business Recorder, 2020