The president of Pakistan approved constitution of 10th National Finance Commission (NFC). According to a notification issued by the government, the National Finance Commission shall consist of the following eleven members:
- Minister for Finance, Government of Pakistan
- Finance Minister, Government of the Punjab
- Minister for Finance, Government of Sindh
- Finance Minister, Government of Khyber Pakhtunkhwa
- Minister for Finance, Government of Balochistan
- Advisor to the Prime Minister on Finance and Revenue
- Mr. Tariq Bajwa, Government of Punjab
- Dr. Asad Sayeed, Government of Sindh
- Mr. Musharraf Rasool Cyan, Government of Khyber Pakhtunkhwa
- Mr. Javed Jabbar, Government of Balochistan
- Finance Secretary, Government of Pakistan
TORs of the NFC
The 10th National Finance Commission shall work on the basis of following Terms of Reference:
- The distribution between Federation and the Provinces of the net proceeds of various tax revenues such as taxes on income, taxes on the sales and purchases of goods imported, exported, produced, manufactured or consumed, export duties on cotton, and such other export duties etc.
- The making of grants-in-aid by the Federal Government to the Provincial Governments.
- The exercise by the Federal Government and the Provincial Governments of the borrowing powers conferred by the Constitution
- Assessment and Allocation of resources to meet expenditures related to Azad Government of the States of Jammu and Kashmir, Government of Gilgit Baltistan and newly merged districts of Khyber Pakhtunkhwa
- Assessment and allocation of resources to meet expenditures made on security and natural disasters/ calamities.
- to assess total public debt and allocation of resources for its repayment.
- Rationalization of subsidies given by the Federal and Provincial Governments in their budgets and agreeing on a mechanism to finance them.
- 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
- Any other matter relating to finance referred to the Commission by the President.
The Article 160(1) of the Constitution of Islamic Republic of Pakistan empowers the president to constitute a NFC after consultation with the Governors of the Provinces. The constitution bounds that the share of Provinces in each Award of NFC shall not be less than previous Award.
Moreover, the recommendations of the National Finance Commission, together with an explanatory memorandum as to the action taken thereon, shall be laid before both Houses and the Provincial Assemblies.
What is National Finance Commission?
In Pakistan, there is a federal government in center along with independent provincial governments in each province. Most of the revenues such as FBR revenues are collected by the federal government. Accordingly, All the revenues received by the Federal Government, all loans raised by the Government and all moneys received by it in repayment of any loan, forms part of a consolidated fund known as the Federal Consolidated Fund.
After eighteenth constitutional amendment all the various functions such as health, education, security etc. are provincial subjects. Therefore, to meet the expenses of provinces, the amount in Fund is distributed among federal and provincial governments. As per the previous NFC award, the federal government receives 42.5% whereas 57.5% goes to the provinces. On the other hand, there is a multi-faceted formula for the distribution of financial resources among the provinces. These factors have different weightage such as population has 82%, poverty and backwardness has 10.3%, revenue collection has 5% and inverse population density has 2.7%.
The NFC aims to bring consensus among the stakeholders and devise a framework for amicable distribution of resources between the federal and the provincial governments.
Although the commission has been mandated to assess and allocate resources for AJK and GB governments, there have no official representation in the NFC to put a case for their people.
