ISLAMABAD - Following the removal of Adviser to Prime Minister on Finance and Revenue Dr Abdul Hafeez Shaikh from the 10th National Finance Commission (NFC), the government yesterday changed the Terms of Reference (ToR) of the Com­mission.

The Finance Division issued a notifi­cation that showed removal of Adviser to the Prime Minister on Finance and Revenue and Secretary Finance from the 10th National Finance Commission. Minister for Finance would be chairman of NFC. Earlier, in notification issued in May 2020, the President had authorised the adviser to the prime minister on fi­nance and revenue to chair meetings of the NFC in the absence of the federal fi­nance minister. In previous notification, Secretary Finance was included in NFC as official expert.

According to the fresh notification, NFC will comprise of Finance Minister, four provincial finance ministers and four non-statutory members represent­ing the provinces. Meanwhile, the gov­ernment has also changed the non-stat­utory member of Balochistan in the NFC. Dr Qaiser Bangali would replace Javed Jabbar from Balochistan. Other non-statutory members, one from each province, include Tariq Bajwa from Punjab, Asad Sayeed from Sindh and Musharraf Rasool Cyan from Khyber Pa­khtunkhwa.

The notification showed that federal government has withdrawn some of the ToRs of the NFC in new notification. The government has withdrawn the ToR re­lated assessing and allocating resourc­es to meet expenditures relating to Azad Jammu and Kashmir, Gilgit-Baltistan and newly merged districts of Khyber Pakhtunkhwa (erstwhile Fata). Mean­while, the government has also with­drawn the ToR related to assessing and allocate resources to meet expenditures made on security and natural disasters/calamities and will be responsible for assessment of total public debt and al­location of resources for its repayment.

The government has also withdrawn the ToR relating to centre desire that provinces should bear some addition­al fiscal responsibilities. This pertains to “exploring ways to reduce losses of state-owned enterprises and agreeing on mechanism for sharing these loss­es between the federal government and the provincial governments”.

According to the ToRs, the Commis­sion would finalize the distribution be­tween the federation and the provinces of the net proceeds of the taxes men­tioned in clause (3) of the Article 160 of the Constitution. The NFC will also be required to make grants-in-aid by the federal government to the provincial governments.

The Commission would resolve the is­sues relating to sharing of financial ex­penses incurred or to be incurred by the federation in respect of subjects and matters falling within the domain of the provinces and vice versa.

Meanwhile, the NFC would address the issues relating to sharing of fi­nancial expenses incurred or to be in­curred by the federation and or the provinces in respect of Trans-Provin­cial matters. Similarly, the Commission would address the issues relating to fi­nancial expense for national projects to be shared by the federation and the provinces and any other matter relat­ing to finance referred to the Commis­sion by the President.