Amidst political strife and a persistent energy crisis, the federation and its four units seemed to have missed the chance to have the 8th National Finance Commission Award before the next year’s federal and provincial budgets become due in May-June 2015.
Finance Minister Ishaq Dar had announced in his budget speech in June to start consultations over the next NFC Award in July.
He had then assured the IMF that it would get a fresh NFC arrangement — keeping in mind low provincial revenues and large cash surpluses — to ensure long-term fiscal sustainability.
Consequently, the centre and the four provinces may have to consensually extend the financial arrangements made by the previous government in the 7th NFC Award for another year as fait accompli, even though a lot of changes have taken place over the last five years.
“This is a major constitutional lapse. While a legal solution is available to condone the discrepancy, this puts a question mark on the legitimacy of the will of the electorate,” said a former finance minister. The previous NFC was constituted by the then-president on July 24, 2009, and had reached a consensus on the 7th NFC Award in about five months.
The current NFC award is set to expire on June 30, 2015, and the new NFC has not been constituted as yet to set shares in the divisible pool for the next five years.
A senior finance ministry official who preferred not be identified confirmed that the finance minister had written letters to the provincial governments to nominate their private members for the new NFC.
Two provinces responded, while nominations from the remaining two are still being awaited as yet.
