KARACHI: On Saturday, Sindh Chief Minister Murad Ali Shah declared that the provinces would receive their portion of the next NFC award in accordance with the constitution.
The chief minister told the media at the Election Commission of Pakistan, where he was going to turn in the nomination papers for the Pakistan People’s Party candidates running in the April 2 Senate election, “It is written in the Constitution about the NFC award that the provinces’ share [in the divisible pool/resources] cannot be reduced [but] it can be increased.”
The chief minister said that he had also heard about the IMF’s demand to lower the provinces’ share in the next NFC Award. He did, however, add that the federal government had apparently told the IMF that the issue could not be addressed or debated because it was constitutionally resolved between the federal and provincial governments.
Reopening discussions on the NFC award, the IMF had called on Pakistan on Thursday in an effort to rectify the persistent disparity in the allocation of fiscal resources between the federal and provincial governments.
Nathan Porter, the IMF Mission Chief to Pakistan, had expressed concerns about the allocation of resources and responsibilities during the first round of talks for a $1.1 billion loan tranche, highlighting the need for a more egalitarian arrangement.
Muhammad Aurangzeb, Pakistan’s finance minister, was present at the negotiations.
The Express Tribune was informed by government representatives that the IMF had highlighted the need to reevaluate the NFC award, highlighting differences in the distribution of resources between federal and provincial authorities.
Under the 2010 model, provinces’ allocation of total federal revenues increased from 47.5% to 57.5% without any corresponding transfer of additional duties. As a result, there is now a persistent budgetary deficit and a growing national debt.
The provincial shares cannot be lowered without a constitutional amendment and the approval of a new formula by all of the provinces, the Pakistani government told the IMF.
There hasn’t been any agreement to review the 2010 NFC award since it was agreed upon for a five-year term.
According to the chief minister of Sindh, the 18th Constitutional Amendment was not passed before the announcement of the 10th NFC award. “The provinces have been given more responsibilities since the 18th Amendment, so the upcoming NFC award should be made accordingly,” he stated. He also mentioned that although the federal government has an opinion, the topics will be debated at the NFC conference.
He restated that the PPP and the Sindh government were requesting that the federal government implement a new NFC award, as the previous one was rendered invalid by the 18th Amendment.
Under the Constitution, the NFC award is governed by Article 160. “The share of the provinces in each award of National Finance Commission shall not be less than the share given to the provinces in the previous award,” the article’s Section 3A states.
