ISLAMABAD: The Natio­nal Finance Commission (NFC) — a key centre-provincial forum on financial matters — has not formally met for about 16 months against a constitutional spirit of biannual sessions and may see a reshuffle soon.

Informed sources said the federal government was expecting a change in NFC composition following the recent elevation of Murad Ali Shah as chief minister of Sindh. An official of the finance ministry told Dawn that the centre was also waiting for a sectoral study from Punjab to convene the next meeting of the NFC.

He said the commission was submitting biannual implementation reports to parliament and would meet in time to approve the report for the past six months ending on June 30. “There is no legal or constitutional issue here,” he claimed.

Article 160 (3B) of the Constitution says: “The federal minister and provincial finance ministers shall monitor the implementation of the (NFC) award biannually and lay their reports before both houses of parliament and the provincial assemblies.”

A former finance minister said that previously NFC meetings were formally convened at least twice a year to review distribution of resources under the NFC award and approve submission of its reports to the assemblies. But the practice has been discontinued by the present government.

Murad Ali Shah continues to hold the additional portfolio of provincial finance minister.

A source in the Sindh government said there was no constitutional or legal bar on a chief minister remaining part of the NFC while also holding the position of finance minister. However, a proposal is under consideration to rope in a seasoned chartered accountant, Asad Ali Shah, as the chief minister’s adviser on finance.

“The problem is that Asad Shah has declined to accept political positions in the past and may do so this time too because of unceremonious exit of former chief minister Syed Qaim Ali Shah,” he said.

Though Murad Ali Shah was an energetic person, it was humanely impossible for anyone to do justice to major ministries of home affairs and finance with a full-time job of chief minister, he added.

“The federal government is violating constitutional requirements regarding the NFC,” said Salim H. Mandviwala, Sindh’s private member of the commission and former federal finance minister of the previous PPP government.

“The government is not holding regular meetings of the commission. It has not convened any meeting since April 2015 and is looking after inter-provincial financial affairs through extensions in the NFC award that expired two years ago,” he said. “The government thinks submission of a biannual report on implementation status of the NFC award to the National Assembly is enough since they have put the seventh NFC on extension. How is this possible?”

Answering a question, Mr Mandviwala said it would be better for Murad Ali Shah to continue holding the finance minister’s post for the remaining period of the current assemblies in view of his extensive engagement in financial matters of the province. But, he added, there was a possibility that a new person was engaged to look after financial issues and represent Sindh in the NFC.

Dr Kaiser Bengali, Balochistan’s private member of the NFC, said he did not even receive the biannual progress report of the commission since he became Balochistan’s private member almost two years ago. He said the NFC was not priority of the present government.

The government has been continuing with the seventh NFC award on centre-provincial revenue sharing, whose five-year constitutional term expired on June 30 last year.

The federal government has been blaming the provincial governments for the second extension of the award to 2009, saying the new NFC is to be based on a series of studies assigned to the provinces which have not been completed yet.

Ironically, Sindh, Balochistan and Khyber Pakhtunkhwa have completed and submitted their reports about a year ago and only the report from Punjab is being awaited.

An official from KP said the centre was least interested in a new NFC award as long as the provinces were offering cash surpluses to the Centre. He said it was a conditionality of the International Monetary Fund that the provinces should not spend their revenue shares to finance the federal government’s fiscal deficit.

He said the NFC had become incomplete after Punjab’s private member Dr Aysha Ghous Pasha was promoted to the rank of provincial finance minister early last year and the provincial government took more than five months to nominate her replacement.

In February this year, the ninth NFC was constituted with the appointment of Naveed Ahsan, former finance secretary, as Punjab’s non-statutory member.

A finance ministry official admitted that no meeting of the NFC had taken place since April 2015 but said its biannual reports were being regularly submitted to the parliament.

Published in Dawn, August 17th, 2016