NFC's perennial lack of consensus.

Byline: Jawaid Bokhari

The lack of consensus at the National Finance Commission (NFC) in evolving a new award every five years since the 7th award was announced 11 years ago is creating a problem in updating the horizontal distribution of resources required to reduce uneven regional development within and among federating units.

One such glaring issue is of Khyber Pakhtunkhwa's share in the NFC Divisible Pool after the merger of Federally Administered Tribal Areas (Fata) with the province. Under the current horizontal distribution formula, KP qualifies for more resources owing to the increase in population, level of backwardness and also probably due to the sparsely populated vast territory earlier administered by Islamabad.

But the PTI is adopting a different and difficult approach. In the first meeting of the reconstituted commission held on February 18, KP Finance Minister Taimur Saleem Jhagra urged all the provinces to share the cost of the erstwhile Fata development package evolved by the centre prior to the merger but linked to it. The proposal is being opposed by other federating units.

The NFC meeting chaired by Federal Finance Minister Dr Abdul Hafeez Sheikh decided to set up a sub-group headed by Mr Jhagra to evolve a consensus on the KP's proposal.

If a federal project is designed to benefit only one province, the beneficiary could share its cost - the financing of other federal projects should be the headache of the centre

Better ways need to be found to resolve such problems. For example, as PTI rules the most developed and populous sub-federation of Punjab, it may not be impossible for the ruling party and its coalition partners to agree voluntarily to a cut in the allocation of funds on a population basis as the province earlier did in the case of 7th award, and increase the share for the removal of countrywide poverty and backwardness. The problem has acquired some urgency following a surge in unemployment and the plunge in wages because of the economic crisis triggered by Covid-19.

PTI has been unable so far to create a separate autonomous South Punjab province. Alternately, the under-developed region needs a stronger national will and commitment for its socioeconomic development.

The NFC's horizontal distribution formula establishes inalienable rights of federating units and their linked responsibility to help uplift the country's less developed areas. The resources are shared on the basis of multiple indicators with their...

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