PESHAWAR: Khyber Pakhtunkhwa fears it will lose Rs21 billion per annum if the centre goes ahead with its proposal to allocate seven per cent of the federal divisible pool proceeds for the National Security Fund and development of special areas.
The proposal floated during a National Finance Commission meeting last Monday seeks three per cent of the FDP money to create the National Security Fund to be used to meet the countrywide requirements, including those of the China-Pakistan Economic Corridor project, and four per cent to develop special areas, including Fata, Azad Jammu and Kashmir and Gilgit-Baltistan.
Earlier, the federal government had hinted at the setting up of the NSF by using three per cent of the provinces’ share in the federal divisible pool money.
Centre intends to allocate 7pc of federal divisible pool money for the purpose
The proposal, which was discussed in the Dec 16 meeting of the Council of Common Interest, was opposed by the KP government.
The council, however, referred it to the NFC declaring it the proper forum to take it up, an official in the know told Dawn.
“It is dishonesty on part of the federal government to deprive provinces of their due share in the federal tax receipts on such pretexts. The argument, which the federal authorities are repeating to set aside these sums on its own, is flawed and violates the provisions of the Constitution,” he said.
The official said the seventh NFC Award put the provinces’ share at 57.5 per cent of the FDP proceeds and the centre’s at 42.5 per cent.
He said the federal government argued that seven per cent would be set aside from the gross FDP and the rest would be distributed to the centre and federating units.
“It does not make any difference whether you call the total FDP as gross or net. The federal government is trying to create a smokescreen for its proposed extra-constitutional act,” he said.
The official however said if the centre was allowed to go ahead with its plans, its share in the federal tax receipts would go up by seven per cent, while the provinces’ share would go down by the same percentage.
He said the allocation of seven per cent of FDP money for the proposed security fund and development of special areas would be a violation of Section 160 (3A) of the Constitution, which clearly stated that the share of provinces in the each NFC award won’t be less than the share given to the provinces in the previous award.
The official said the federal government however insisted it won’t be a violation of the Constitution if it deducted the proposed money from the gross divisible pool proceeds and distribute the remaining under the NFC Award.
“Our (KP’s) point of view on the issue is very clear that the federal government can’t do so,” he said.
The official said the centre was expected to present the modalities of the proposal in the next NFC meeting to take place in Lahore in the first or second week of January.
“Other provinces, too, are likely to oppose the centre’s attempt to have their part of the pie, too,” he said, adding that the decision at the NFC was needed to be made by consensus.
When contacted, KP finance minister Muzafar Said confirmed that the federal government took the matter to the CCI, which referred it to the NFC saying it didn’t fall in its purview.
He said when the proposal was raised in the NFC meeting, KP, Balochistan and Sindh opposed it and asked the centre to share it with them.
“In principal, the provinces didn’t agree to the proposal,” he said.
The minister said the federal government was trying to set aside seven per cent of FDP money before dividing the rest between provinces and itself.
He said apparently, the federal government was trying to ‘create issues’ to delay the announcement of the ninth NFC Award.
courtesy : dawn news