The NFC award

Ever since the passage of the 18th Amendment to the constitution, which devolved most powers from the centre to the provinces, the annual National Finance Commission award has become even more crucial for important services like health and education to be adequately funded. Instead, successive governments have failed to update the award since 2010 and have relied on a series of ad hoc extensions to the award. This year, the federal government has failed to do even that so far even though the current financial year began over a month ago. Now, the new Sindh Chief Minister Murad Ali Shah has spoken out about the delay and called it a violation of the constitution. He wants the government to announce the award as early as possible and to ensure that money is distributed equitably between provinces. Just last month, Minister for Inter-Provincial Coordination Riaz Hussain Pirzada had revealed that the NFC award was not discussed even once in the 18 meetings the Council of Common Interests has held in the last 10 years. The 7th NFC award was supposed to lapse in 2015 and last year a presidential order was issued extending the award for another year or till the next award is formulated, whichever comes earlier. Now, the deadline has passed and the government is seeking another ad-hoc extension.

The government has decided to blame the provinces for the delay, saying they hadn’t completed a series of studies that had been assigned to them. Balochistan hasn’t submitted the studies it was asked to, saying it is irrelevant to the NFC award while Sindh had not appointed its member to the commission till last year but this does not excuse the current delay. The government seems to be happy with the arrangement as it exists since it allows them to arbitrarily hand out and withhold money to meet revenue and budget deficit targets. The IMF has said that the provinces should not be forced to spend their share of revenue to finance the deficit but the government has not abided by that condition. It has also increased the alienation felt by smaller provinces since it reinforces the impression that the PML-N government serves only Punjab and ignores the needs of everyone else. Both Sindh and Balochistan’s private members of the NFC, Saleem Mandviwalla and Kaiser Bengali, have spoken out about the government’s indifference and said they have been told there will be no new award till the next fiscal year. If the government continues to operate the way it has, with decisions taken in a haphazard manner and no permanent structures put in place, even next year looks like an optimistic target.