• Move comes amid downward revision in growth forecast to 3.5pc for current fiscal
• Calls from IMF, armed forces, others to re-balance transfer of resources to provinces go unheeded
• Centre ‘backs off’ from changes to award after deal with PPP
ISLAMABAD: The inaugural session of the National Finance Commission (NFC), constituted three months ago, is not in sight, as the proposed date of Nov 18 has also been postponed amid a downward revision in the economic growth forecast by up to 0.7 per cent to 3.5pc for the current fiscal year.
Informed sources said told Dawn that Prime Minister Shehbaz Sharif wanted to set the ball rolling at the political level on key Centre-provincial matters before opening the debate for financial rearrangements at the technically-constitutional forum of NFC.
The 11th NFC was constituted on Aug 22 to give a fresh award for the sharing of federal divisible resources among the Centre and the provinces.
The first meeting was originally called for Aug 27 and then delayed to Aug 29 for unannounced reasons. The meeting was postponed again on the request of Sindh government due to floods.
The 7th NFC award delivered in 2009 thus remains in place for over 15 years against its five-year constitutional term.
As a result, repeated calls from various quarters, including the finance ministry, the armed forces, and the International Monetary Fund (IMF), to re-balance the transfer of a larger chunk of divisible pool resources to the provinces under the 7th NFC award have gone unaddressed.
The Constitution promises that provincial shares in each NFC award cannot be reduced. The NFC award has to be achieved with consensus of five parties — the Centre and the four provinces.
Under the 7th NFC award, the four provinces are collectively entitled to 57.5pc of divisible pool taxes, besides the revenue from income tax, wealth tax, capital value tax, general sales tax, customs duties and federal excise.
The provincial governments receive their horizontal shares on the basis of population, poverty, revenue collection, and inverse population density.
This allows Punjab to obtain a share of 51.74pc, Sindh 24.55pc, Khyber Pakhtunkhwa 14.62pc, and Balochistan 9.09pc.
Political bargain
The sources said the provinces had been conveyed the date of Nov 18 for the inaugural meeting early this month, although without issuing a formal notification.
They added that the Prime Minister’s Office called for postponing the meeting and for not communicating a new date to the provinces before the premier could take up the matter with the coalition partners.
The prime minister has officially no role in the NFC engagements after the commission is constituted by the president.
