ISLAMABAD: Khyber Pakhtunkhwa (KPK) and Balochistan have demanded to raise their share in Federal Divisible Pool under 10th 10th National Finance Commission (NFC) to address their financial deprivations. The Commission Thursday constituted six sub-groups to prepare sectoral recommendations.
Presided over by Finance Minister Dr Abdul Hafeez Shaikh, the meeting did not set a schedule for future meetings or deadlines for completion of studies on six thematic topics and agreed to hold discussions in future if certain terms of reference (TORs) of the NFC were outside its constitutional mandate.
The participants also noted mounting pension liabilities as a major concern and agreed to adopt a common way forward through detailed consultations. Sindh disagreed to share expenditure for tribal region and showed reservations over some TORs.
Secretary Finance Kamran Ali Akmal will coordinate two working groups on National Economic Development Framework or Macroeconomic Framework and vertical distribution (between the centre and provinces) of resources under the divisible pool. All the provinces would be part of the group. Every NFC had to be mutually agreed by all five participants.
Each provincial finance minister will coordinate four other groups with representation from all stakeholders. Sindh would lead the group on straight transfers, given its higher share on account of oil and gas related resources. The group on horizontal distribution of resources (among the four provinces) will be conducted by Balochistan because the province demanded 15pc share out of the divisible pool instead of existing 9.09pc
KP was assigned the leadership role on development and upgradation needs of the merged districts of formerly Federally Administered Tribal Areas (Fata) and thus additional resource requirement. Punjab would be leading the group on ease of doing business and tax harmonisation across the country.
Some provinces expressed reservations over one or two items of the TORs, particularly relating to sharing of fiscal responsibilities on debt servicing, mega federal development projects, security and Fata merger.
In response to a question Sindh Chief Minister Murad Ali Shah said the story of insufficient capacity for utilisation of additional resources under the 7th NFC award was no more relevant but disbursement of funds under the provincial shares by the federal government was such that his province had to invariably face a situation on 30th of each month as to how much overdraft was required to pay salaries. Mr Shah said the actual problem was that FBR collections in last two three years had been lower than fiscal year 2017 at around Rs3.9tr while the requirements of all provinces and even the centre had gone up.