The federal government has proposed creation of National Security Fund (NSF) in which three per cent revenue would be pooled for security purposes. The Ministry of Finance floated the idea of creating NSF by keeping 3 per cent of gross divisible pool in the fund during the 2nd meeting of the National Finance Commission (NFC) for the 9th NFC Award.
The Commission agreed that the next year''s budget (2017-18) would be made on the basis of 9th National Finance Commission Award, a participant of the meeting revealed to Business Recorder on Monday. "The National Security Fund would be finalised with the consultations of the provinces," said Finance Minister Ishaq Dar while talking to media after a meeting on NFC Award. Ishaq Dar said according to the Constitution, no reduction can be made in the share of any province.
The federal government and four provincial governments agreed for constituting fresh NFC Award at the earliest. Dar said that decisions regarding NFC Award would be taken with consensus. He said that four working groups were formed under 9th NFC Award and they had submitted their reports. He said 10th of next month has been fixed for preparations of a final report on the Award and the next meeting will be held in the third week of the next month.
He said that during the meeting, in the light of groups'' report a roadmap for future macroeconomic stability at federal and provincial levels would also be discussed with a focus on the provinces. Replying to a question about waiving off disputed dues of electricity consumers of Sindh to the tune of Rs 50 billion, Dar said that the federal government would face a loss but it would not hurt as Sindh is also part of Pakistan.
Ishaq Dar chaired the 2nd meeting of the 9th NFC in which provincial finance ministers of Sindh, Balochistan and Khyber Pakhtunkhwa did not participate. Punjab Finance Minister Aisha Ghous Pasha, Senator Saleem Mandviwalla (Member NFC Sindh), Professor Muhammad Ibrahim Khan (Member NFC KPK) and Dr Kaiser Bengali (Member NFC Balochistan) participated in the meeting. Finance Secretaries from the four provinces also attended the meeting. Ishaq Dar gave a brief overview on the structural and reform initiatives taken by the federal government during the last three years. He appreciated the consultations undertaken by the provinces and the federal government in a cordial atmosphere under the ambit of the NFC. On this occasion minutes of the first meeting of 9th NFC Award were adopted.
The meeting also considered and approved the Biannual Monitoring Report of the 7th NFC Award for the period January to June 2016. The Chairman NFC in consensus with representatives of provinces decided that the biannual implementation monitoring report of the 7th NFC Award will be placed before the Parliament during the current week as per the constitutional requirement.
The Commission received presentations from the four Working Groups namely, Resource Mobilisation at Federal and Provincial Level (Punjab), Devolved versus Integrated Tax Structure-Evaluation of Tax Collection Framework in Pakistan (Sindh), Allocation Efficiency and Expenditure Analysis at the Provincial and Federal levels (KPK) and Rationalisation of Subsidy and Grants (Federal Government), which had been constituted to deliberate on specific areas and prepare recommendations for the 9th NFC Award. The Commission Members appreciated the work done by the Working Groups which will provide a sound basis for the ongoing deliberations of the Commission for the next NFC Award. The Commission directed to update the reports of the Groups latest by 10th December, 2016.
Talking to Business Recorder Professor Ibrahim said that the creation of NSF is just a proposal and no decision has been taken in this regard yet. However, he said that Balochistan and KPK also expressed concerns in the meeting over the low number of projects - one for KP and five for Balochistan in the China-Pakistan Economic Corridor (CPEC). He further said that KPK would demand a 5 per cent share in the upcoming meeting as it is the worst terrorism-hit province.
He said that Sindh province asked for the powers to collect royalty on oil and gas production and collection of general sales tax on goods, as well the GST on services. However the meeting did not agree to the proposals. He further said that participants expressed concern over the inordinate delay; however, it was agreed upon that next meetings would be held on a regular basis. Speaking on the occasion, representatives of the provinces expressed the resolve to finalise the 9th NFC Award at the earliest. They said the new Award will be based on consensus.