ISLAMABAD: Having received no response for over a month, the federal government has again reminded the provinces about their constitutional responsibility to operationalise the National Finance Commission (NFC) to set the future course of sharing common financial resources.

In a reminder to the finance secretaries of the four provinces, the Ministry of Finance said the four chief ministers were requested by Finance Minister Asad Umar on Sept 3 to confirm their existing members or make fresh nominations for non-statutory members so as to reconstitute the NFC and start deliberations for future resource distribution.

None of the provincial governments responded to the letters sent by the finance minister. They neither made fresh nominations nor endorsed previous members to complete the NFC.

“The Ministry of Finance has now reminded the provincial finance secretaries to make the required nominations, as so far none of the provincial governments have shared the names of their respective non-statutory members,” said a statement.

The finance secretaries have been reminded that in terms of Clause (1) of article 160 of the Constitution, the 9th NFC was constituted on April 24, 2015. Since new governments are in place both at the federal and provincial levels after the general elections 2018, re-confirmation of the non-statutory members from the provinces is necessary.

The federal and provincial finance ministers are the statutory members of the NFC. It is customary to include one non-statutory member from each province.

An official said most of the non-statutory provincial members were expected to be replaced with fresh nominees in view of changed political governments at the federal and provincial level.

Even the Sindh government is likely to send a new member to the NFC since its non-statutory member Saleem H. Mandviwala was elevated to the position of deputy chairman senate.

Likewise, the private members from the Punjab and Khyber Pakhtunkhwa in the previous set up would most likely change because they represented PML-N and Jamaat-e-Islami (PTI’s coalition partner in KP) respectively.

The PTI governments in both these provinces would like to place their own nominees on the NFC. Similarly, Balochistan’s private member Kaiser Bengali was co-opted by then chief minister Dr Abdul Malik and continued by the PML-N.

Practically, it would be a totally new NFC because all the finance ministers, except from Sindh, would be new faces on the constitutional body.

The PML-N government had last reconstituted the 9th NFC in February 2016, when Naveed Ahsan was made non-statutory member from Punjab in place of Dr Aysha Ghous-Pasha who became provincial minister in Shahbaz Sharif cabinet. The NFC, however, held only a couple of formal meetings of the commission in five years instead of compulsory 10 biannual meetings.

As a consequence, the 7th NFC award announced in 2009 continued annual extensions and remains in place even now instead of constitutional term of five years.

There have been calls from various quarters – including the defence authorities and former finance ministers – for re-adjustment in centre-provincial sharing of resources to create fiscal space for the centre to meet the additional requirement of security expenses besides special allocations for special areas like Azad Jammu and Kashmir, Gilgit-Baltistan and tribal areas now merged with the Khyber Pakhtunkhwa.

The previous NFC award had expired on June 30, 2015 but had seen annual extensions since then. The provincial governments get shares from the federal government under the 7th NFC award as per the following formula: Punjab 51.74pc, Sindh 24.55pc, Khyber Pakhtunkhwa 14.62pc and Balochistan 9.09pc.

Published in Dawn, October 5th, 2018