Sindh Chief Minister Syed Murad Ali Shah said Wednesday that a proposal for allocating funds from the federal National Finance Commission (NFC) Award for the security of China-Pakistan Economic Corridor (CPEC) projects is 'unconstitutional'.

Shah also opposed the use of these funds under the proposal for uplift projects in the Federally Administered Tribal Areas (Fata).

Shah made these observations in a meeting with Punjab Finance Minister Aisha Ghaus Pasha, who had called on him at the Chief Minister House in Karachi on Wednesday, a press release stated.

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Shah said the federal government's proposal to allocate 3pc funds from the divisible pool for security arrangements for CPEC-related projects and 4pc for the development of Fata, Gilgit-Baltitstan and Kashmir is unreasonable and against the Constitution. "The divisible pool is only for distribution of collected funds among the provinces," he added.

The Sindh CM said the proposal would also establish a wrong precedent, which is why all provinces should oppose it collectively.

According to the official statement, the Sindh CM is of the opinion that the federal government has already allocated 1pc of the funds from the divisible pool for maintenance of law and order in Khyber Pakhtunkhwa (KP) alone. Therefore, the recent demand is unconstitutional, and "cannot be met".

"The Sindh government has already raised a force of at least 2,000 ex-army men to provide security to CPEC-related projects and its employees. Apart from that, the Sindh government has spent Rs300 billion on maintenance of law and order from 2010-11 to 2015-16.

“The federal government did not bother to bear a single penny of the expense, and now it is pressing the provinces to give funds from their shares" he said, adding that this was unacceptable.

“I request the Punjab, KP and Balochistan governments to develop consensus and oppose the proposal,” he said.

The Punjab finance minister assured Shah that she would support him.

The Sindh CM also said provincial governments should have the right to collect sales tax on goods and deposit the same with the federal government for onward distribution among the provinces according to the agreed share.

“We have prepared the case and the Punjab government should also make a similar case so that [the argument] can be presented in the next NFC meeting,” he said.

He also said the federal government's unilateral decision implementing at-source deduction of wealth tax without consulting Sindh government is 'illegal'.

"The deduction is made purely on presumptions. The federal government should reconcile the figures with the Sindh government" before making deductions, the statement from the CM House said.

The Punjab finance minister validated Shah's reservations and grievances, saying they are "genuine" and that the opinion of the Punjab government on the issue aligns with the Sindh government.