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Reconstituted 9th NFC Meeting To be held Today

ISLAMABAD – The first meeting of reconstituted 9th National Finance Commission (NFC) meeting will  be held today in Islamabad for discussion on strategy for the new NFC award new resources distribution formula between centre and provinces.

The NFC’s meeting will be chaired by Finance Minister Asad Umar and the four provincial finance ministers and four non-statutory members would attend it.

“The meeting will receive briefing on fiscal position by provinces as well as federal government. The meeting will also have general discussion on strategy for deliberations over new NFC award,” said a brief handout released by the ministry of finance.

President Dr Arif Alvi had recently reconstituted the 9th NFC to work out a new resources 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 the four provincial finance ministers and their respective technical members, according to the notification.  The Centre had also included the federal finance secretary as the tenth member as the official expert.

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.

The federal government and provinces reached on a deadlock over a proposal of centre for 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. The International Monetary Fund (IMF) had also asked Pakistan to slash provincial share under the NFC to restrict the increasing budget deficit.

Under the 7th NFC award, the federal government has to transfer 57.5 percent of federal taxes to the four provinces. The federal government has to meet the expenditures of debt servicing, defence, development, pensions, salaries and others through remaining 42.5 percent of the taxes. Ultimately, the federal government had to borrow to meet the deficit, which goes out of control.