ISLAMABAd
The first meeting for constituting the 8th National Finance Commission (NFC) award is likely to be held by the end of April, which would determine new agreement between Centre and Provinces to balance devolution of revenue and expenditure responsibilities.
“The first meeting of the 8th NFC award is expected to held by the end of April”, said Rana Asad Amin spokesperson to the Finance Ministry while talking to The Nation on Saturday. Finance Minister Ishaq Dar sent the proposal to the President of Pakistan through the Prime Minister for the constitution of the 8th National Finance Commission (NFC) on March 31.
Besides the Federal Minister for Finance Ishaq Dar and four provincial Finance Ministers, the other members are Ms Ayesha Ghous Pasha from Punjab, professor M. Ibrahim Khan from KP and Qaisar Bangali from Balochistan and Senator Saleem Mandviwall from Sindh.
“Under the new round of National Finance Commission (NFC) negotiations, the federal government will seek an agreement to balance devolution of revenue and expenditure responsibilities in a way that is consistent with the objective of macroeconomic stability and long-term sustainability of intergovernmental fiscal relations. The new NFC negotiations are scheduled to begin in the coming months, and IMF and World Bank technical advice will be provided to help inform the discussions”, Pakistan stated in Memorandum of Economic and Financial Policies written to IMF.
The constitutional life of the current NFC will automatically end on June 30, 2015. Sources informed The Nation that the NFC has to be constituted before May 20, five years to the date when former President Asif Ali Zardari promulgated the 7th NFC Order. Due to 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. However, Spokesperson to the Finance Ministry told The Nation that fresh NFC would be constituted before the upcoming budget.
The law, called Distribution of Revenues and grants in-Aid Order, was promulgated in 2010 through a presidential order. The 7th NFC Award guarantees provinces’ share at 57.5 percent of net federal tax receipts. According to the 7th NFC formula, Punjab’s share stood at 51.74 percent, Sindh 24.55 percent, KP 14.62 percent, including one percent as share of war against terror, and Balochistan 9.09 percent. The centre had estimated to transfer Rs1.72 trillion to the four provinces under the NFC award in the ongoing financial year.  According to the budget estimates, Punjab is supposed to receive Rs812.786 billion, Sindh Rs464.007 billion, KP Rs283.68 billion and Balochistan Rs159.71 billion.