ISLAMABAD: The finance ministry asked the president on Tuesday to constitute the eighth National Finance Commission after provincial nominations for the commission’s private members were completed.

The ministry said that three provinces — Punjab, Balochistan and Khyber Pakhtunkhwa — had nominated their members two months ago, but the commission could not be constituted in the absence of Sindh’s nominees. “The government of Sindh has now nominated Saleem Mandviwala,” the finance ministry said in a statement.

The summary for the constitution of the eighth NFC was forwarded by Finance Minister Ishaq Dar through the prime minister, as required under Article 160 of the Constitution.

Know more: 7th NFC Award may be extended for a year

Besides the finance minister and the four provincial finance ministers, the members include Ayesha Ghous Pasha from Punjab, Prof M. Ibrahim Khan from KP and Kaisar Bengali from Balochistan.

Article 160 requires that, “the President shall constitute a National Finance Commission consisting of the minister of finance of the federal government, the ministers of finance of the provincial governments, and such other persons as may be appointed by the president after consultation with the governors of the provinces,”.

“The matter was pending as government of Sindh was deliberating on the name of the candidate,” said the statement, adding that the first meeting of the commission would be held as soon as its constitution was approved by the president.

Process was held up by absence of Sindh nominee

Due to a shortage of time, the federal government had been considering ways to extend the revenue-sharing arrangement for another year, beyond the constitutionally protected five-year period. The Sindh chief minister had, however, opposed such a consideration. During a meeting with the prime minister a few days ago, Syed Qaim Ali Shah had demanded that the government should announce an interim arrangement only for three months and during this period, a five-year award be agreed upon through consensus.

“The only solution now left with the five stakeholders — the centre and the four federating units — is to extend existing arrangements for another year as a fait accompli,” a federal government official said a few days ago, explaining that the constitutional life of the current NFC will automatically end on June 30, 2015.

The federal and provincial budgets for next year are due in May-June. In fact, most of the budgetary arrangements, particularly the development agenda, are completed latest by the middle of May every year.

Finance Minister Ishaq Dar had announced in his budget speech last year that consultations over the next NFC award would begin in July. Then, he assured the International Monetary Fund, that a fresh NFC arrangement would be crafted keeping in mind low provincial revenues and large cash surpluses, to ensure long-term fiscal sustainability.

The seventh NFC award was signed by all the parties on Dec 30, 2009 in Gwadar and took another few months before a formal notification enabled its inclusion in the federal and provincial budgets for the fiscal year 2010-11.

Published in Dawn, April 1st, 2015

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