ISLAMABAD - The 9th National Finance Commission (NFC) has so far failed to formulate a fresh resource sharing formula between federal government and the provinces in its almost five years constitutional tenure.
The Ministry of Finance in April 2015 had notified 9th NFC to work out a mechanism to distribute resources between the federal government and the provinces for the next years.
The 9th NFC’s five years constitutional tenure would end by June 2020 without formulating the new resources sharing formula. Mandate of 9th NFC was to constitute 8th National Finance Commission (NFC) award.
The five-year constitutional term of the 7th NFC award expired on June 30, 2015. Since then, the federal government is continuously extending the seventh award after failing to constitute the new NFC Award.
Previous government of PML-N and incumbent government of PTI, both are failed to formulate the fresh resource sharing formula between federal government and the provinces.
In March 2019, the 9th National Finance Commission, under the chairmanship of former finance minister Asad Umar, had agreed to make efforts to finalise the NFC Award by December 31 2019.
However, no concrete development had made since Abdul Hafeez Shaikh has assumed the charge of Adviser to Prime Minister on Finance and Revenue.
“The National Finance Commission has very limited time to constitute new award within current fiscal year. The government had not shown any seriousness in this regard,” said an official who had worked with the 9th NFC.
He further said that President of Pakistan would approve to constitute 10th National Finance Commission before June 2020 if existing commission failed to complete its task. The federal government would transfer the revenues to the four provincial governments under the existing 7th NFC Award.
The government would extend the 7th NFC Award for another year. The provincial governments get shares from the federal government under NFC award as per the said formula.
Punjab gets 51.74 percent, Sindh 24.55 percent, Khyber-Pakhtunkhwa 14.62 percent and Balochistan 9.09 percent.
In the current fiscal year, 2019-20, the federal government had projected to transfer Rs3254.6 billion to the provinces during as against Rs2462.7 billion of the outgoing year.
However, the federal government would revise the amount after reducing the annual tax collection target of Federal Board of Revenue (FBR) to Rs5238 billion from Rs5550 billion after facing shortfall in collection.
The centre had already transferred less than Rs201.2 billion to the provincial governments under the NFC award during first quarter (July to September) of the current fiscal year.
Four provinces have received Rs612.5 billion from the federal government as against their projected share of Rs813.63 billion.
The data of ministry of finance showed that federal government had transferred Rs293.5 billion to Punjab province in the first quarter of the current financial year.
The amount is 18.2 percent of the annual provincial share from the federal government.
Meanwhile, the Sindh province has received only 17.8 percent share from the federal government as against the project 25pc share.
According to the documents, the Khyber-Pakhtunkhwa province has received Rs97.03 billion from the federal government, which is will 18 percent of its annual share. However, Balochistan has received more than projected share.
