ISLAMABAD - The federal and four provincial governments will sit together today (Wednesday) in Islamabad for discussing the strategy on fresh National Finance Commission (NFC) award — new resources distribution formula between centre and provinces.

Finance Minister Asad Umar has convened the first meeting of the reconstituted 9th National Finance Commission (NFC) today.

President Dr Arif Alvi had recently reconstituted the 9th NFC to work out a new resource-distribution formula between the centre and federating units. The Ministry of Finance had notified the new 10-member commission.

Finance Minister Asad Umar will chair the NFC, which will comprise four provincial finance ministers and their respective technical members, according to the notification. The Centre had also included the federal finance secretary as the 10th member as the official expert.

Four provincial finance ministers and four non-statutory members would attend the NFC meeting. The today’s meeting will receive briefing on fiscal position by provinces as well as federation. The meeting will also have general discussion on strategy for deliberations over new NFC award. The reconstituted 9th NFC would be required to give 8th NFC award for five years.

Sources in ministry of finance informed The Nation that federal government may float a proposal for creation of a ‘special pool’ for sharing responsibilities of social sector, security and development of special areas jointly from divisible pool. The previous government had also presented a suggestion of cutting down the overall size of the federal divisible pool by seven percent to the provinces, allocating three percent for the National Security Fund (NSF) and four percent for Gilgit-Baltistan, Fata and AJK. Later, the caretaker Finance Minister Shamshad Akhtar had also suggested that 6 percent of the divisible pool should be set aside for development of special areas, social protection under Benazir Income Support Programme and security spending.

It is worth mention here that the 7th NFC Award had expired in June 2015. The PML-N government had extended the previous 7th award for consecutive three years. Under the 7th NFC Award, the federal government is bound to transfer 57.5 per cent resources to all the four provinces from federal divisible pool. Under the current award, Punjab gets 51.74pc share, Sindh 24.55pc, Khyber Pakhtunkhwa 14.62 per cent and Balochistan 9.09pc under the divisible pool. In the budget for current fiscal year, the federal government would transfer Rs2590 billion to the four provinces under NFC award that is 11.82 per cent more than the share of previous year. Out of the total revenue of the federal government, Punjab stands to get Rs1.28 trillion, Sindh would receive Rs648 billion, Khyber Pakhtunkhwa would gain Rs426.6 billion (including one per cent to compensate for the war on terror), and Balochistan would be allocated Rs233 billion.