Government moves to reconstitute NFC

ISLAMABAD: The Centre asked the provinces on Wednesday to either confirm their existing members or make fresh nominations for non-statutory members to enable it to reconstitute the National Finance Commission (NFC) and start deliberations on future resource distribution.

“After general elections 2018, new governments are in place both at the federal and provincial levels, necessitating re-confirmation of non-statutory members from the provinces,” an official statement quoted Finance Minister Asad Umar as saying in the letters he wrote to the chief ministers of the four provinces. The minister desired reconstitution of the 9th NFC.

The NFC is required to be set up at intervals not exceeding five years under Article 160 (1) of the Constitution. The federal and provincial finance ministers are statutory members of the NFC. It is customary to include one non-statutory member from each province.

Commission will mostly comprise new members in view of change in governments

The statement said the chief ministers had been asked to either reconfirm their earlier nominated members or intimate the change in nominations to enable the federal government to notify the 9th NFC.

An official said that most of the non-statutory provincial members would be replaced with fresh nominees after the change in governments at the federal and provincial levels. Even the Sindh government is likely to send a new member to the NFC since its non-statutory member Saleem H. Mandviwala was elected deputy chairman of the Senate.

Likewise, the private members from Punjab and Khyber Pakhtunkhwa are most likely to be replaced as they had represented the Pakistan Muslim League-Nawaz and Jamaat-i-Islami (Pakistan Tehreek-i-Insaf’s coalition partner in KP), respectively, in the previous set-up. The PTI governments in these two provinces would like to nominate their own members for the NFC. Similarly, Balochistan’s private member Kaiser Bengali was co-opted by then chief minister Dr Abdul Malik and continued by the PML-N.

Practically, it would be a totally new NFC because all the finance ministers, except for Sindh, would be new faces on the constitutional body.

The PML-N government had last reconstituted the 9th NFC in February 2016 when Naveed Ahsan was made non-statutory member from Punjab, but called only a couple of formal meetings of the commission in five years instead of compulsory 10 biannual meetings.

As a consequence, the 7th NFC award announced in 2009 continued annual extensions and remains in place even now instead of a constitutional term of five years.

Various quarters, including the defence authorities and former finance ministers, have been calling for readjustment in centre-provincial sharing of resources to create fiscal space for the Centre to meet additional requirement of security expenses, besides special allocations for special areas like Azad Jammu and Kashmir, Gilgit-Baltistan and tribal areas now merged with Khyber Pakhtunkhwa.

The previous NFC award had expired on June 30, 2015, but seen annual extensions since then. The provincial governments get shares from the federal government under the 7th NFC award as per the following formula: Punjab 51.74 per cent, Sindh 24.55pc, KP 14.62pc and Balochistan 9.09pc.

Published in Dawn, September 6th, 2018