The federal government and provinces have decided that the next meeting of the 9th National Finance Commission (NFC) will be held by the new government after elections. Sources told Business Recorder on Friday that the decision was taken during the last meeting of provincial finance secretaries held under the chairmanship of additional finance secretary (budget) in the Finance Division. The meeting was attended by senior joint secretary (PF), provincial finance secretaries and their representatives.
"Decision of holding next meeting of 9th NFC may be left with the new government," the meeting decided. The senior joint secretary (PF) gave an overview of discussion held on mentioned agenda items in the last meeting of provincial finance secretaries. He mentioned that in the last meeting the provincial secretaries were requested to consult the provincial political leadership on convening the next meeting of 9th NFC in the backdrop of following facts:
Firstly, tenure of present Parliament is completing soon. In this scenario, should the next meeting of 9th NFC be held now or the decision in this regard be left with the new government? Secondly, provisional census report of Census 2017 indicates changes in population, which necessitates revisiting horizontal distribution of divisible pool share.
The senior joint secretary (PF) requested the provincial secretaries to give their input on agenda items. The finance secretary KPK conveyed viewpoint of both members of NFC from KPK, saying that next NFC meeting should be held as soon as possible. The provincial representatives from other provinces were of the view that decision of holding next meeting of NFC may be left with the new government in view of the following facts:
Firstly, both federal and provincial governments are busy in the budget preparations. Moreover, little time is left in the tenure of the current Parliament. Secondly, Census Report 2017 has not been notified as yet which necessitates revisiting horizontal distribution of divisible pool share.
Thirdly, apart from population, latest data on other parameters used for working out horizontal distribution share should also be available.
Regarding the proposal of setting aside 3 percent and 4 percent from divisible pool for National Security Fund and Special Areas respectively, it was considered opinion of the representatives of all provinces that allocation of funds from divisible pool for National Security Fund and Special Areas respectively will decrease the shares of the provinces. Provinces are already funding expenditure on local law enforcement agencies. Special areas are the responsibility of the federal government. They therefore did not recommend these allocations. Provinces will furnish their written response in this context.
The meeting deliberated upon the reports submitted by the four working groups constituted by 9th NFC. The KPK finance secretary was of the view that these reports are useful for financial management; however, these did not fall in the purview of the NFC. The senior joint secretary (PF), Finance Division, stated that mandate of Finance Secretaries Meeting is limited to review and remove the impediments in holding the next meeting of 9th NFC, without getting into the mandate of the NFC.
The meeting concluded that the decision of holding next meeting of 9th NFC may be left with the new government. Secondly, the provinces did not recommend for allocation of funds from divisible pool for special areas and national security. Thirdly, consolidation of the recommendations of four working groups is not the mandate of the Finance Secretaries Committee.
The provinces will clear their dues on account of vaccines under EPI programme within fifteen days, failing which the Finance Division on the orders of federal adjuster will deduct the shares of provinces under the NFC arrangements.
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