7th NFC Award, 18th Amendment: only one aspect of fiscal decentralisation achieved

The government said on Saturday that only one aspect of fiscal decentralisation, which is essential for economic growth, has been achieved as a result of recent development of 7th National Finance Commission (NFC) Award and 18th Constitutional Amendment.
While speaking as chairperson of the session on fiscal decentralisation at the 31st annual general meeting and conference organised by Pakistan Society of Development Economists, Asif Bajwa, Chief Statistician, Pakistan Bureau of Statistics (PBS) stated that tilt of resources has shifted from federal government to provinces after the 7th NFC Award but provincial finance commissions have failed to transfer resources to district level. Thus, only one aspect of the fiscal decentralisation was achieved.
Bajwa said that after the 18th Amendment, fiscal decentralisation was taken far more serious connotation and during discussion on 7th NFC Award concept of fiscal decentralisation was also on the minds of all those who had negotiated the award. As a result of the 7th NFC Award, he said provincial government share has gone up from 48 percent of the divisible pool to 58.5 percent and total to 61 percent, which was a quantum shift of resources from federal government to provinces.
However, Bajwa deplored that provincial finance commission, which was also held to further transfer the resources to district level, has failed to do so. Thus, the one aspect of fiscal decentralisation has taken place. The Chief Statistician PBS maintained there is also need to take into consideration the role of provinces in tax collection whether they are making any effort to mobilise the resources or leaving tax collecting responsibility on the federal government.
Bushra Yasmeen in her presentation, on whether fiscal decentralisation matter for poverty and income inequality in Pakistan, stated that that it is evident from developed countries that it helps in tracking social issues and reduce poverty. She said fiscal decentralisation is the process through which power of revenue and expenditure is transferred from federal government to provinces. The paper also highlighted that the low tax collection would make it impossible for the government to achieve social development goals. The paper said that there are 52,800 companies registered with SECP out of which only one-third file tax returns.
Another paper on provincial economic growth showed that decentralisation has a positive effect on provincial economic growth. Competition among the provincial governments in given circumstances has increased with positive results but provinces have to strengthen their institutions. Bajwa, in his concluding remakes after the papers were presented, emphasised the need to address the real issue of the people and suggested that think tanks must give suggestion and policy inputs to the government in this regard.