NFC Award and Balochistan

Published on – January 12, 2019 – 6:00 am
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Pakistan Tehreek-i-Insaf (PTI) government is planning to arrange the next National Finance Commission in the last week of January. These days, experts are discussing the upcoming Commission and its decision, since there have been some fundamental changes in Pakistan.  Award plays a key role in enhancing the financial status and working ability of the state machinery at provincial as well as federal level. Due to interprovincial disparities in income distribution, capabilities in tax collection and expenditure disbursement, there was a strong need for the fiscal arrangement between the federal and the provincial governments. The allocation of means and responsibilities among different tiers of government is a critical issue as its misappropriation may lead to political, economic and social unrest.


Pakistan Tehreek-i-Insaf (PTI) government is planning to arrange the next National Finance Commission in the last week of January. These days, experts are discussing the upcoming Commission and its decision, since there have been some fundamental changes in Pakistan.  Award plays a key role in enhancing the financial status and working ability of the state machinery at provincial as well as federal level. Due to interprovincial disparities in income distribution, capabilities in tax collection and expenditure disbursement, there was a strong need for the fiscal arrangement between the federal and the provincial governments. The allocation of means and responsibilities among different tiers of government is a critical issue as its misappropriation may lead to political, economic and social unrest.
Balochistan was given in millions during the half a century and couple of billion prior to the last NFC Award for its ADP. Whatever huge fund allocated for Provincial PSDP during the past five years are left at the mercy of provincial rulers and common people had no share.
On the other hand population of Balochistan has also increased but federal government’s response towards its own province was same. Balochistan is not given the due share even in its own projects which are feeding the federation with profit of billions.
The National Finance Commission Award constituted under the Article 160 of the Constitution emerged to take control of financial imbalances and manage the financial resources of four provinces to meet their expenditure liabilities while alleviating the horizontal fiscal imbalances. As per Constitution, the program awards the designs of financial formulas of economic distribution to the provincial and federal government for five consecutive years.
At present, the four provinces get 57.5 per cent of the resources from the divisible pool of taxes under the seventh NFC Award distribution, whereas the federal share stands at 42.5 per cent. Among the four, the Punjab province gets the lion share at 51.74 per cent, followed by Sindh at 24.55 per cent, Khyber Pakhtunkhwa at 14.62 per cent and Balochistan at 9.09 per cent.
Lawmakers from Sindh and Balochistan criticized the government policy of reducing their share. Almost all political parties of Baluchistan, including Pakhtunkhwa Milli Awami Party (PkMAP), Awami National Party (ANP), Hazara Democratic Party (HDP), National Party, and Baluchistan National Party (BNP-Mengal) have strongly opposed the decision of the federal government. The argument given by these parties is that since the provinces are already facing many challenges, therefore, they are not in a position to let the federal government give money to FATA.
Former Chief Minister’s stated several times that Balochistan should be given its due share and NFC award that is how it will be capable of curbing the losses in fiscal year.
Every year pensions and salaries are increased but the fact is ignored that Balochistan is not capable of managing the losses with least share in the budget.
Political commentators criticized the government for not planning on the upcoming Award which is going to alter the existing inter-provincial and the center-provinces resource sharing arrangement. Observer opines that the government should have arranged meetings of the researchers and experts in order to deliberate on the matter and device some interesting and workable solutions. It is pertinent to note here that by principle, the federal government cannot reduce the share of any federating unit.
As far as the development of the Balochistan is concerned, there are several reports which suggest that the issue has never been the allocation of the fund but of their utility and widespread corruption in the province. The same stands true in the case of Sindh where Pakistan People’s Party has been ruling for more than a decade.