NFC order

In an appreciable move, the Balochistan High Court (BHC) has set aside the presidential notification to constitute the 10th National Finance Commission (NFC). President Dr Arif Alvi had formed the commission last month to review the resource allocation to provinces from the federal divisible pool. The BHC has also ruled that the appointment of NFC members was unconstitutional, and the two-member bench that also annulled the appointment of Adviser to the PM Abdul Hafeez Sheikh. Similarly the federal finance secretary has also been removed from the NFC as a member. The BHC has invoked Article 160 of the constitution of Pakistan for its implementation and ordered that the procedure for the appointment of NFC members must be in accordance with the constitutional provisions. This means that the governor of Balochistan will have to appoint a new member from the province on the recommendation of Chief Minister Jam Kamal.

What the court has ruled was something many finance and legal experts had also been saying. And many had questioned the government's disregard for constitutional and legal formalities. The recent dismissal of the presidential reference against Justice Qazi Faez Isa is another case in point. It seems that the finance and legal teams of the government take leave of their legal obligations in these matters and move headlong in suggesting various steps to the president. Since the NFC is a constitutional entity that need not be tinkered with – as it distributes financial resources among the federating units – utmost care should have been taken while appointing its members and developing its terms of reference.

The formation of the 10th NFC has already been delayed, resulting in undesirable procrastination in the review of the NFC Award. Constitutionally speaking, every five years the government of Pakistan must form a new NFC and revise the award. In this matter, consensus development should take priority over all other considerations. Finally, we must stress that a new NFC must be constituted without delay and appropriate members should be notified from each province. Second, the ToR must be strictly in accordance with the essential responsibilities of the NFC as stipulated in the constitution, without trying to stretch its domain to include matters that are beyond its pale. Since it is the Ministry of Finance that leads this exercise, as a first step the government needs to appoint a full-time finance minister to avoid further embarrassment. The ToR that includes matters such as natural disasters and security must be rectified and focus on the NFC’s primary responsibilities.