NFC award: Dawn Editorial
Sunday, 13 Dec, 2009
The hammering out of a consensus among the centre and the provinces on the seventh National Finance Commission award is a major achievement
and a positive event for those who believe that the future of a vibrant Pakistan lies in a democratic federation.
The seventh NFC has established a number of milestones. For the division of resources among the provinces, the federation has moved away from the
unsatisfactory single criterion of population to a multi-criteria award that includes poverty/backwardness, revenue collection and generation, and inverse
population density. Moreover, the centre and the provinces have shown a spirit of fair play when addressing Balochistan and the NWFP. Balochistan
has been guaranteed a minimum award, with the centre pledging to make up for any shortfall, while in a nod towards the NWFP’s extraordinary burden
in the war against militancy, the province has been promised a special one per cent of the undivided federal pool.
The centre too has shown flexibility. The old framework in which subventions, grants and other special awards by the centre took 10 per cent out of the
total revenue pool has been dropped and the revenue collection charges pocketed by the centre have been slashed to one per cent. All of this increases
transparency and takes some of the sting out of the charge that the centre is short-changing the provinces. Of course, the NFC has not addressed all
complaints, and challenges remain in the years ahead.
Foremost among the challenges are the revenue and expenditure projections. Finance Minister Shaukat Tarin has said that the tax-to-GDP ratio will be
increased to 13.9 per cent over the next five years — it currently hovers around 10 per cent — and that federal expenses will be reduced to 12 per cent of
GDP at the end of that period, as compared to the present 14.6 per cent. But hiking tax collection/revenue and slashing expenditure is easier said than
done — indeed, every government promises the same but few have been able to deliver.
Nevertheless, while cautioning that the seventh NFC is not a panacea, we are indeed grateful that it appears to be a step in the right direction. In some
quarters, such has been the dismay over the current phase in the transition to democracy that people could be forgiven for thinking that perhaps
democracy can never work in Pakistan. But the consensus on the seventh NFC award is a sign that, political differences aside, not only do the
provinces and the centre want to make democracy work, they in fact can do so when given the time and space to make difficult decisions.
http://www.dawn.com
EDITORIAL: A historic agreement
Sunday, December 13, 2009
The seventh consensus National Finance Commission (NFC) Award agreed between the Centre and the provinces and amongst the provinces is a
historic step forward in the direction of strengthening the federation by increasing the provinces’ fiscal space. The long standing demand of the smaller
provinces for more provincial autonomy has taken a giant leap forward as a result. The Award sees generosity on the part of the Centre in transferring,
at the expense of its own share, resources to the provinces. The previous Award rewarded the Centre with 52.5 percent of the divisible pool, whereas
the present Award reduces this to 44 percent, i.e. an increase of 8.5 percent in the share of the provinces.
Collection charges for taxes collected on behalf of the provinces will be cut from 5 percent to 1 percent. Sales tax on services has finally been
recognized as a provincial tax and will henceforth be collected by the provinces themselves. Sindh will be given Rs 6 billion in return for agreeing to give
equal weightage in the horizontal distribution of resources amongst the provinces to revenue generation and collection. NWFP will receive an additional
1 percent from the federal divisible pool as compensation for its losses and needs in the war on terror.
As far as the horizontal distribution amongst the provinces is concerned, the demand of the smaller provinces that they had been voicing since the
1980s that a multi-criteria basis be adopted instead of population alone, which favoured Punjab, has finally been accepted. The respective weightage
will now be 82 percent for population (still in favour of Punjab, although reduced), 10.3 percent for poverty/backwardness (favouring NWFP and
Balochistan), 5 percent for revenue generation/collection (favouring Sindh), and 2.7 percent for inverse population density (favouring Balochistan).
Balochistan’s share of the horizontal distribution has risen from 7.17 percent to 9.09 percent, an increase of 1.92 percent, while those of Punjab, Sindh
and NWFP respectively have decreased by 1.27 percent, 0.39 percent and 0.26 percent, a recognition of the special needs of Balochistan. The largest in
area but poorest province is guaranteed Rs. 83 billion in the first year of the Award, any shortfall to be made up by the federal government. This special
dispensation will continue throughout the five years of the Award’s life.
The projections of revenue and its distribution through the five years ahead seem optimistic, implying a virtual doubling of the overall revenues and
therefore the respective shares of the Centre and the provinces. The caution in this respect is that this will depend crucially on economic recovery, which
is also conditioned by the recovery of the global economy. There are hopeful signs of shoots of recovery domestically and internationally, but it remains
a mixed picture and therefore will have to await the trends of the future.
The consensus Award untangled a knot that had defied agreement for 19 years, with arbitrary Awards intervening since 1990. It is a triumph of the
consensual ability of democratic governments and political forces to resolve long standing and stubborn conundrums. Both the Centre and Punjab, and
to a certain extent Sindh and Frontier, have shown magnanimity and generosity in order to cleave through the complications. Pakistan’s history has few
such agreements to boast of. One that comes readily to mind is the 1991 Water Accord, also the brainchild of a democratically elected government.
Such consensual agreements work to strengthen democracy, bind the federating units, and make the country as a whole more united. Their
demonstrated effect is not to be underestimated. The lesson is clear: democracy works when it comes to resolving contentious issues with a credibility
and legitimacy not enjoyed by authoritarian or praetorian dispensations. *
SECOND EDITORIAL: Countering terrorism
The government’s decision to establish the National Counter Terrorism Authority (NACTA) is a welcome move. NACTA will serve as a focal institution to
“coordinate and unify” national counter-terrorism efforts. It seems as if we never do anything when the need has been palpably felt for some time or until
we are nudged from abroad. For the last two years, it was obvious that without a coordinating super-agency to bring all the intelligence and security
organisations together, the struggle against terrorism would always be fought with one hand tied behind our backs. Fortuitously, since the European
Union (EU) has pledged15 million for NACTA, the government has finally given it a green signal. Interpol, too, has expressed interest in this agency.
Had this agency been formed earlier, things might have been quite different. Logically, the optimal path would have been to pool all the intelligence in
order to pre-empt terrorist attacks. Arguably, because of lack of coordination, gaps emerged that were inevitably exploited by the terrorist networks.
Prime Minister Gilani has announced that NACTA would have three wings: one to counter extremism, second to counter terrorism and the third for
research and analysis. Tariq Pervez — former FIA director general — has been appointed Chairman NACTA. It is not clear, however, whether the military
and civilian intelligence agencies would answer to him.
There has been some criticism of the Interior Ministry lately as it has failed to pre-empt or stop terrorist attacks in recent months. Though this is
inherently a difficult task, without good intelligence and with a lack of coordination at the national level, the ministry was hampered in countering terrorist
activities. The intelligence agencies need to boost their efforts to infiltrate the terrorist networks. Although it is in the nature of the intelligence agencies
not to share information with others, it is advisable at this point in time that they submit their reports vis-à-vis terrorism at least to NACTA. The terrorists
have united under one roof, whereas our intelligence agencies work separately. This has made the task of the terrorists far easier. Thus it is very
important that our security forces, police and intelligence agencies cooperate with each other to help eradicate terrorism from our soil.
The newly appointed NACTA Chairman said that once the agency becomes functional, a ‘national action plan’ would be drawn up, in addition to periodic
threat assessment reports. These steps are of vital importance as the terrorist networks have to be dealt with with an iron hand. Military operations
alone cannot serve the purpose; a proper plan of action is required to ensure that the terrorists are crushed. The belated move to establish a counter-
terrorism agency at the national level is a step in the right direction. It is hoped that it lives up to expectations. *
http://www.dailytimes.com.pk/
7th NFC award
Sunday, December 13, 2009
Sindh to get Rs 70 bn more next year: Qaim; Terms NFC award a great leap forward for fiscal autonomy of provinces
By Imtiaz Ali
KARACHI: Sindh’s overall increase in revenue for the next year would be about Rs 70 billion according to the decisions taken at the 7th NFC Award
meeting in Lahore, and other provinces would also get substantial benefits, said Sindh Chief Minister Syed Qaim Ali Shah on Saturday.
He termed the agreements among the Centre and the 1provinces for the NFC Award a great leap forward for the fiscal autonomy of provinces.
Addressing a crowded press conference at the CM House after chairing a cabinet meeting, he said this Friday was a historic day when all the provinces
and the Centre took important decisions to resolve the ‘burning issue’ of the NFC Award after 36 years under the 1973 Constitution and 64 years after
the creation of Pakistan, which reflected the victory of the democratic forces, thConstitution and institutions.
The chief minister, flanked by leaders of the coalition parties, the MQM, the PML-F and the ANP and the Sindh ministers, opined that the agreement on
the 7th NFC Award had increased understanding among the provinces, which would also strengthen democracy and the political process in the
country. It would also strengthen the governments both at the Centre and in the provinces because of increased finances, he added.
He declared that now the provinces would not get subvention or aid from the Centre. Instead, the national kitty would be distributed in a way so that the
provinces could address their problems.
Dr Kaisar Bengali, Sindh’s representative in the NFC, said the NFC would hold quarterly meetings to implement the decisions taken at the Lahore
meeting for sharing resources.
Qaim said all provinces would get monetary benefits according to the agreement. Elaborating, he said Balochistan’s share has been increased up to
Rs 83 billion. Similarly, 1 per cent of the total divisible pool has been earmarked for the NWFP to compensate it for the destruction caused by the war on
terror.
Kaisar Bengali explained that the Punjab would also get Rs 70 billion more on account of changes in the vertical distribution but its Rs 10 billion would
be reduced owing to multiple criteria for the horizontal distribution.
Qaim said Sindh’s loss has also been reduced because of the acceptance of revenue collection and revenue generation criteria for the distribution of
resources among the provinces and handing over GST on services to the provinces, which were main demands of Sindh.
He said the Centre was collecting 70 per cent GST on services from Sindh and distributed it among the provinces on the basis of population, which was
causing Rs 4-5 billion loss to Sindh. He said it was not easy to convince other provinces on this issue but Sindh convinced them with logic.
He said other three provinces said they could not collect GST on services but Sindh opposed it as to how the Centre could collect it as according to the
1973 Constitution, GST was a provincial subject. “We have capacity to collect GST on services,” he said, adding that Sindh would now get Rs 40 billion
revenue from it.
He said Sindh would also get Rs 8 billion through the GDS (gas development surcharge).
About the Divisible Pool, he said its size has been proposed to be increased in the interest of national solidarity and provincial harmony. The federal
government committed to make efforts to boost the tax revenue, he said, adding, in addition, the pool will be increased by reducing the collection
charges from 5 to 1 per cent.
About the vertical distribution (distribution of resources between the Centre and the provinces), he said the provincial share of the pool will be increased
from the existing 47.5 per cent to 56 per cent in the first year of the NFC Award and 57.5 per cent in the remaining years of the award. This is an increase
of over 21 per cent in the provincial share, he said.
About the horizontal distribution (distribution of resources among the provinces), Qaim said the long-standing demand of Sindh, the NWFP and
Balochistan to distribute the divisible pool according to multiple indicators has been accepted. He pointed out that Balochistan’s longstanding demand
for area/inverse population density (IPD), the NWFP’s demand for the war on terror, Sindh’s decades-old demand of the revenue collection and the
revenue generation together has been accepted apart from poverty and human development index in which, Sindh would also get benefits. He termed it
major gains for Sindh.
http://www.thenews.com.pk
7th NFC Award announced with consensus
Signing ceremony of the award to be held in Balochistan
LAHORE: The 7th National Finance Commission Award has been announced. The provinces are set to get 12.5 percent more from the federal divisible
pool in the next five years. They will get 56 percent in 2010 and 57.5 percent for the following four years.
The decision was made at a meeting attended by the chief ministers of the four provinces. The issue of NFC Award had been lingering on for past 19
years, which has now been resolved with unanimity and an accommodating approach of the provinces.
All provinces had already agreed on a vertical distribution. But for the first time, they have agreed on a horizontal distribution based on a multiple-criteria
formula.
The criteria include population, which constitutes 82 percent of the share, poverty, which will get 12 percent and area and revenue generation that are to
get three percent each.
Announcing the award, Finance Minister, Shaukat Tareen said that in accordance with population density, Punjab will get 51 percent of the share, Sindh
will get 24 percent, NWFP, 14 percent and Balochistan 9 percent. The NWFP will get one percent from all provinces for fighting the war on terror.
Balochistan will get 83 billion rupees, which is 10 billion more than the 6th NFC award.
Hailing the decision as the second achievement of democracy following the restoration of the judiciary, Punjab Chief Minsiter Shahbaz Sharif thanked
all the provinces for reaching a consensus on the issue. CM Sindh, Syed Qaim Ali Shah said that it was a historic day after 1974, when
Balochistan package vague on concurrent list:
Pildat
Sunday, 13 Dec, 2009
ISLAMABAD: The Pakistan Institute of Legislative Development and Transparency (Pildat) has said that Aghaz-e-Huqooq-e-Balochistan package
remains vague on whether the deletion of the entire concurrent list is envisaged or only some parts of it are included in the package.
An analytical background paper released by the Pildat said that without appropriate constitutional amendments, the package will mainly remain only a
set of proposals.
The paper said that there was a need to accelerate the work of Parliamentary Committee on Constitutional Reforms which has been considering
constitutional amendments since June this year.
It added that in March 2007, the Wasim Sajjad Committee on Provincial Autonomy had recommended deletion of only 14 of the 47 items in the
concurrent list.
There may not be unanimity or even consensus on this matter as some parties may have reservations on deletion of some of the subjects in this list on
the ground that this will lead to an undesirable weakening of the federal structure, the Pildat said.
It said the Balochistan package might have been much better by following the recommendations of the Parliamentary Committee on Provincial
Autonomy which proposed that the Council of Common Interests (CCI) and the National Economic Council (NEC) should meet at least twice each year
and that Articles 153 and 156 of the Constitution should be amended accordingly.
The analysis carried out by former governor Punjab, Shahid Hamid, said that to satisfy Baloch leaders and people, concrete efforts are needed to
ensure the implementation of the package.
The paper criticised the policy of establishing new cantonments in Balochistan and recommended a careful consideration and review of this by the
government.
There are a number of cantonments in Punjab, Sindh and NWFP and more are being built on as-needed basis.
The security requirements of Pakistan must not be subordinated to any consideration of ‘winning’ the temporary good-will of some political forces in
Balochistan, the paper argues.
The paper analyses that references to the deletion of the Police Order 2002 and the Balochistan Local Government Ordinance 2001 from the Sixth
Schedule as being under consideration of the Parliamentary Committee on Constitutional Reforms go indirectly to the core of the real problem in
federal-provincial relations.
‘Law and order and local government are both provincial subjects but the federation imposes its views in these matters on the provinces and then
prevents them from making any changes in these laws,’ the paper said.
It proves that the federation does not respect provincial autonomy even in matters that squarely fall within the powers of the provinces, the Pildat said.
‘This mindset of high political and bureaucratic levels of the federation requires a fundamental change,’ it added.
The paper said meaningful autonomy will not come to Balochistan or other provinces till they have direct control of more sources of revenue.
Quoting a World Bank study, it said that 93 per cent of the combined revenues of the federal, provincial and district governments were collected by the
federal government whose own expenditure accounts for 72 per cent of the whole.
The provincial and district governments spend 28 per cent of the combined expenditures but they raise only seven per cent of the combined revenues.
Three-fourths of all provincial and district governments’ expenditures are met through resource transfers from the federal government as per the NFC
awards.
http://www.dawn.com
Karzai’s brother is on CIA payroll: report
Wednesday, 28 Oct, 2009
WASHINGTON: Ahmed Wali Karzai, the brother of the president of Afghanistan, gets regular payments from the CIA and has for much of the past eight
years, The New York Times reported Tuesday.
The newspaper said that according to current and former American officials, the CIA pays Karzai for a variety of services, including helping to recruit an
Afghan paramilitary force that operates at the CIA’s direction in and around Kandahar.
The CIA’s ties to Karzai, who is a suspected player in the country’s illegal opium trade, have created deep divisions within the Obama administration,
the Times said.
Allegations that Karzai is involved in the drug trade have circulated in Kabul for months. He denies them.
Critics say the ties with Karzai complicate the United States’ increasingly tense relationship with his older brother, President Hamid Karzai. The CIA’s
practices also suggest that the United States is not doing everything in its power to stamp out the lucrative Afghan drug trade, a major source of revenue
for the Taliban.
Some American officials argue that the reliance on Ahmed Wali Karzai, a central figure in the south of the country where the Taliban is dominant,
undermines the US push to develop an effective central government that can maintain law and order and eventually allow the United States to withdraw.
‘If we are going to conduct a population-centric strategy in Afghanistan, and we are perceived as backing thugs, then we are just undermining
ourselves,’ Major General Michael T Flynn, the senior American military intelligence official in Afghanistan, was quoted by the Times in an article
published on its Web site.
Ahmed Wali Karzai told the Times that he cooperates with American civilian and military officials but does not engage in the drug trade and does not
receive payments from the CIA.
Karzai helps the CIA operate a paramilitary group, the Kandahar Strike Force, which is used for raids against suspected insurgents and terrorists,
according to several American officials. Karzai also is paid for allowing the CIA and American Special Operations troops to rent a large compound
outside the city, which also is the base of the Kandahar Strike Force, the Times said.
Karzai also helps the CIA communicate with and sometimes meet with Afghans loyal to the Taliban, the newspaper reported.
CIA spokesman Paul Gimigliano told the Times: ‘No intelligence organization worth the name would ever entertain these kinds of allegations.’
CIA spokesman George Little declined to comment on the report.—AP
http://www.dawn.com/
Sunday, 13 Dec, 2009
The hammering out of a consensus among the centre and the provinces on the seventh National Finance Commission award is a major achievement
and a positive event for those who believe that the future of a vibrant Pakistan lies in a democratic federation.
The seventh NFC has established a number of milestones. For the division of resources among the provinces, the federation has moved away from the
unsatisfactory single criterion of population to a multi-criteria award that includes poverty/backwardness, revenue collection and generation, and inverse
population density. Moreover, the centre and the provinces have shown a spirit of fair play when addressing Balochistan and the NWFP. Balochistan
has been guaranteed a minimum award, with the centre pledging to make up for any shortfall, while in a nod towards the NWFP’s extraordinary burden
in the war against militancy, the province has been promised a special one per cent of the undivided federal pool.
The centre too has shown flexibility. The old framework in which subventions, grants and other special awards by the centre took 10 per cent out of the
total revenue pool has been dropped and the revenue collection charges pocketed by the centre have been slashed to one per cent. All of this increases
transparency and takes some of the sting out of the charge that the centre is short-changing the provinces. Of course, the NFC has not addressed all
complaints, and challenges remain in the years ahead.
Foremost among the challenges are the revenue and expenditure projections. Finance Minister Shaukat Tarin has said that the tax-to-GDP ratio will be
increased to 13.9 per cent over the next five years — it currently hovers around 10 per cent — and that federal expenses will be reduced to 12 per cent of
GDP at the end of that period, as compared to the present 14.6 per cent. But hiking tax collection/revenue and slashing expenditure is easier said than
done — indeed, every government promises the same but few have been able to deliver.
Nevertheless, while cautioning that the seventh NFC is not a panacea, we are indeed grateful that it appears to be a step in the right direction. In some
quarters, such has been the dismay over the current phase in the transition to democracy that people could be forgiven for thinking that perhaps
democracy can never work in Pakistan. But the consensus on the seventh NFC award is a sign that, political differences aside, not only do the
provinces and the centre want to make democracy work, they in fact can do so when given the time and space to make difficult decisions.
http://www.dawn.com
EDITORIAL: A historic agreement
Sunday, December 13, 2009
The seventh consensus National Finance Commission (NFC) Award agreed between the Centre and the provinces and amongst the provinces is a
historic step forward in the direction of strengthening the federation by increasing the provinces’ fiscal space. The long standing demand of the smaller
provinces for more provincial autonomy has taken a giant leap forward as a result. The Award sees generosity on the part of the Centre in transferring,
at the expense of its own share, resources to the provinces. The previous Award rewarded the Centre with 52.5 percent of the divisible pool, whereas
the present Award reduces this to 44 percent, i.e. an increase of 8.5 percent in the share of the provinces.
Collection charges for taxes collected on behalf of the provinces will be cut from 5 percent to 1 percent. Sales tax on services has finally been
recognized as a provincial tax and will henceforth be collected by the provinces themselves. Sindh will be given Rs 6 billion in return for agreeing to give
equal weightage in the horizontal distribution of resources amongst the provinces to revenue generation and collection. NWFP will receive an additional
1 percent from the federal divisible pool as compensation for its losses and needs in the war on terror.
As far as the horizontal distribution amongst the provinces is concerned, the demand of the smaller provinces that they had been voicing since the
1980s that a multi-criteria basis be adopted instead of population alone, which favoured Punjab, has finally been accepted. The respective weightage
will now be 82 percent for population (still in favour of Punjab, although reduced), 10.3 percent for poverty/backwardness (favouring NWFP and
Balochistan), 5 percent for revenue generation/collection (favouring Sindh), and 2.7 percent for inverse population density (favouring Balochistan).
Balochistan’s share of the horizontal distribution has risen from 7.17 percent to 9.09 percent, an increase of 1.92 percent, while those of Punjab, Sindh
and NWFP respectively have decreased by 1.27 percent, 0.39 percent and 0.26 percent, a recognition of the special needs of Balochistan. The largest in
area but poorest province is guaranteed Rs. 83 billion in the first year of the Award, any shortfall to be made up by the federal government. This special
dispensation will continue throughout the five years of the Award’s life.
The projections of revenue and its distribution through the five years ahead seem optimistic, implying a virtual doubling of the overall revenues and
therefore the respective shares of the Centre and the provinces. The caution in this respect is that this will depend crucially on economic recovery, which
is also conditioned by the recovery of the global economy. There are hopeful signs of shoots of recovery domestically and internationally, but it remains
a mixed picture and therefore will have to await the trends of the future.
The consensus Award untangled a knot that had defied agreement for 19 years, with arbitrary Awards intervening since 1990. It is a triumph of the
consensual ability of democratic governments and political forces to resolve long standing and stubborn conundrums. Both the Centre and Punjab, and
to a certain extent Sindh and Frontier, have shown magnanimity and generosity in order to cleave through the complications. Pakistan’s history has few
such agreements to boast of. One that comes readily to mind is the 1991 Water Accord, also the brainchild of a democratically elected government.
Such consensual agreements work to strengthen democracy, bind the federating units, and make the country as a whole more united. Their
demonstrated effect is not to be underestimated. The lesson is clear: democracy works when it comes to resolving contentious issues with a credibility
and legitimacy not enjoyed by authoritarian or praetorian dispensations. *
SECOND EDITORIAL: Countering terrorism
The government’s decision to establish the National Counter Terrorism Authority (NACTA) is a welcome move. NACTA will serve as a focal institution to
“coordinate and unify” national counter-terrorism efforts. It seems as if we never do anything when the need has been palpably felt for some time or until
we are nudged from abroad. For the last two years, it was obvious that without a coordinating super-agency to bring all the intelligence and security
organisations together, the struggle against terrorism would always be fought with one hand tied behind our backs. Fortuitously, since the European
Union (EU) has pledged15 million for NACTA, the government has finally given it a green signal. Interpol, too, has expressed interest in this agency.
Had this agency been formed earlier, things might have been quite different. Logically, the optimal path would have been to pool all the intelligence in
order to pre-empt terrorist attacks. Arguably, because of lack of coordination, gaps emerged that were inevitably exploited by the terrorist networks.
Prime Minister Gilani has announced that NACTA would have three wings: one to counter extremism, second to counter terrorism and the third for
research and analysis. Tariq Pervez — former FIA director general — has been appointed Chairman NACTA. It is not clear, however, whether the military
and civilian intelligence agencies would answer to him.
There has been some criticism of the Interior Ministry lately as it has failed to pre-empt or stop terrorist attacks in recent months. Though this is
inherently a difficult task, without good intelligence and with a lack of coordination at the national level, the ministry was hampered in countering terrorist
activities. The intelligence agencies need to boost their efforts to infiltrate the terrorist networks. Although it is in the nature of the intelligence agencies
not to share information with others, it is advisable at this point in time that they submit their reports vis-à-vis terrorism at least to NACTA. The terrorists
have united under one roof, whereas our intelligence agencies work separately. This has made the task of the terrorists far easier. Thus it is very
important that our security forces, police and intelligence agencies cooperate with each other to help eradicate terrorism from our soil.
The newly appointed NACTA Chairman said that once the agency becomes functional, a ‘national action plan’ would be drawn up, in addition to periodic
threat assessment reports. These steps are of vital importance as the terrorist networks have to be dealt with with an iron hand. Military operations
alone cannot serve the purpose; a proper plan of action is required to ensure that the terrorists are crushed. The belated move to establish a counter-
terrorism agency at the national level is a step in the right direction. It is hoped that it lives up to expectations. *
http://www.dailytimes.com.pk/
7th NFC award
Sunday, December 13, 2009
Sindh to get Rs 70 bn more next year: Qaim; Terms NFC award a great leap forward for fiscal autonomy of provinces
By Imtiaz Ali
KARACHI: Sindh’s overall increase in revenue for the next year would be about Rs 70 billion according to the decisions taken at the 7th NFC Award
meeting in Lahore, and other provinces would also get substantial benefits, said Sindh Chief Minister Syed Qaim Ali Shah on Saturday.
He termed the agreements among the Centre and the 1provinces for the NFC Award a great leap forward for the fiscal autonomy of provinces.
Addressing a crowded press conference at the CM House after chairing a cabinet meeting, he said this Friday was a historic day when all the provinces
and the Centre took important decisions to resolve the ‘burning issue’ of the NFC Award after 36 years under the 1973 Constitution and 64 years after
the creation of Pakistan, which reflected the victory of the democratic forces, thConstitution and institutions.
The chief minister, flanked by leaders of the coalition parties, the MQM, the PML-F and the ANP and the Sindh ministers, opined that the agreement on
the 7th NFC Award had increased understanding among the provinces, which would also strengthen democracy and the political process in the
country. It would also strengthen the governments both at the Centre and in the provinces because of increased finances, he added.
He declared that now the provinces would not get subvention or aid from the Centre. Instead, the national kitty would be distributed in a way so that the
provinces could address their problems.
Dr Kaisar Bengali, Sindh’s representative in the NFC, said the NFC would hold quarterly meetings to implement the decisions taken at the Lahore
meeting for sharing resources.
Qaim said all provinces would get monetary benefits according to the agreement. Elaborating, he said Balochistan’s share has been increased up to
Rs 83 billion. Similarly, 1 per cent of the total divisible pool has been earmarked for the NWFP to compensate it for the destruction caused by the war on
terror.
Kaisar Bengali explained that the Punjab would also get Rs 70 billion more on account of changes in the vertical distribution but its Rs 10 billion would
be reduced owing to multiple criteria for the horizontal distribution.
Qaim said Sindh’s loss has also been reduced because of the acceptance of revenue collection and revenue generation criteria for the distribution of
resources among the provinces and handing over GST on services to the provinces, which were main demands of Sindh.
He said the Centre was collecting 70 per cent GST on services from Sindh and distributed it among the provinces on the basis of population, which was
causing Rs 4-5 billion loss to Sindh. He said it was not easy to convince other provinces on this issue but Sindh convinced them with logic.
He said other three provinces said they could not collect GST on services but Sindh opposed it as to how the Centre could collect it as according to the
1973 Constitution, GST was a provincial subject. “We have capacity to collect GST on services,” he said, adding that Sindh would now get Rs 40 billion
revenue from it.
He said Sindh would also get Rs 8 billion through the GDS (gas development surcharge).
About the Divisible Pool, he said its size has been proposed to be increased in the interest of national solidarity and provincial harmony. The federal
government committed to make efforts to boost the tax revenue, he said, adding, in addition, the pool will be increased by reducing the collection
charges from 5 to 1 per cent.
About the vertical distribution (distribution of resources between the Centre and the provinces), he said the provincial share of the pool will be increased
from the existing 47.5 per cent to 56 per cent in the first year of the NFC Award and 57.5 per cent in the remaining years of the award. This is an increase
of over 21 per cent in the provincial share, he said.
About the horizontal distribution (distribution of resources among the provinces), Qaim said the long-standing demand of Sindh, the NWFP and
Balochistan to distribute the divisible pool according to multiple indicators has been accepted. He pointed out that Balochistan’s longstanding demand
for area/inverse population density (IPD), the NWFP’s demand for the war on terror, Sindh’s decades-old demand of the revenue collection and the
revenue generation together has been accepted apart from poverty and human development index in which, Sindh would also get benefits. He termed it
major gains for Sindh.
http://www.thenews.com.pk
7th NFC Award announced with consensus
Signing ceremony of the award to be held in Balochistan
LAHORE: The 7th National Finance Commission Award has been announced. The provinces are set to get 12.5 percent more from the federal divisible
pool in the next five years. They will get 56 percent in 2010 and 57.5 percent for the following four years.
The decision was made at a meeting attended by the chief ministers of the four provinces. The issue of NFC Award had been lingering on for past 19
years, which has now been resolved with unanimity and an accommodating approach of the provinces.
All provinces had already agreed on a vertical distribution. But for the first time, they have agreed on a horizontal distribution based on a multiple-criteria
formula.
The criteria include population, which constitutes 82 percent of the share, poverty, which will get 12 percent and area and revenue generation that are to
get three percent each.
Announcing the award, Finance Minister, Shaukat Tareen said that in accordance with population density, Punjab will get 51 percent of the share, Sindh
will get 24 percent, NWFP, 14 percent and Balochistan 9 percent. The NWFP will get one percent from all provinces for fighting the war on terror.
Balochistan will get 83 billion rupees, which is 10 billion more than the 6th NFC award.
Hailing the decision as the second achievement of democracy following the restoration of the judiciary, Punjab Chief Minsiter Shahbaz Sharif thanked
all the provinces for reaching a consensus on the issue. CM Sindh, Syed Qaim Ali Shah said that it was a historic day after 1974, when
Balochistan package vague on concurrent list:
Pildat
Sunday, 13 Dec, 2009
ISLAMABAD: The Pakistan Institute of Legislative Development and Transparency (Pildat) has said that Aghaz-e-Huqooq-e-Balochistan package
remains vague on whether the deletion of the entire concurrent list is envisaged or only some parts of it are included in the package.
An analytical background paper released by the Pildat said that without appropriate constitutional amendments, the package will mainly remain only a
set of proposals.
The paper said that there was a need to accelerate the work of Parliamentary Committee on Constitutional Reforms which has been considering
constitutional amendments since June this year.
It added that in March 2007, the Wasim Sajjad Committee on Provincial Autonomy had recommended deletion of only 14 of the 47 items in the
concurrent list.
There may not be unanimity or even consensus on this matter as some parties may have reservations on deletion of some of the subjects in this list on
the ground that this will lead to an undesirable weakening of the federal structure, the Pildat said.
It said the Balochistan package might have been much better by following the recommendations of the Parliamentary Committee on Provincial
Autonomy which proposed that the Council of Common Interests (CCI) and the National Economic Council (NEC) should meet at least twice each year
and that Articles 153 and 156 of the Constitution should be amended accordingly.
The analysis carried out by former governor Punjab, Shahid Hamid, said that to satisfy Baloch leaders and people, concrete efforts are needed to
ensure the implementation of the package.
The paper criticised the policy of establishing new cantonments in Balochistan and recommended a careful consideration and review of this by the
government.
There are a number of cantonments in Punjab, Sindh and NWFP and more are being built on as-needed basis.
The security requirements of Pakistan must not be subordinated to any consideration of ‘winning’ the temporary good-will of some political forces in
Balochistan, the paper argues.
The paper analyses that references to the deletion of the Police Order 2002 and the Balochistan Local Government Ordinance 2001 from the Sixth
Schedule as being under consideration of the Parliamentary Committee on Constitutional Reforms go indirectly to the core of the real problem in
federal-provincial relations.
‘Law and order and local government are both provincial subjects but the federation imposes its views in these matters on the provinces and then
prevents them from making any changes in these laws,’ the paper said.
It proves that the federation does not respect provincial autonomy even in matters that squarely fall within the powers of the provinces, the Pildat said.
‘This mindset of high political and bureaucratic levels of the federation requires a fundamental change,’ it added.
The paper said meaningful autonomy will not come to Balochistan or other provinces till they have direct control of more sources of revenue.
Quoting a World Bank study, it said that 93 per cent of the combined revenues of the federal, provincial and district governments were collected by the
federal government whose own expenditure accounts for 72 per cent of the whole.
The provincial and district governments spend 28 per cent of the combined expenditures but they raise only seven per cent of the combined revenues.
Three-fourths of all provincial and district governments’ expenditures are met through resource transfers from the federal government as per the NFC
awards.
http://www.dawn.com
Karzai’s brother is on CIA payroll: report
Wednesday, 28 Oct, 2009
WASHINGTON: Ahmed Wali Karzai, the brother of the president of Afghanistan, gets regular payments from the CIA and has for much of the past eight
years, The New York Times reported Tuesday.
The newspaper said that according to current and former American officials, the CIA pays Karzai for a variety of services, including helping to recruit an
Afghan paramilitary force that operates at the CIA’s direction in and around Kandahar.
The CIA’s ties to Karzai, who is a suspected player in the country’s illegal opium trade, have created deep divisions within the Obama administration,
the Times said.
Allegations that Karzai is involved in the drug trade have circulated in Kabul for months. He denies them.
Critics say the ties with Karzai complicate the United States’ increasingly tense relationship with his older brother, President Hamid Karzai. The CIA’s
practices also suggest that the United States is not doing everything in its power to stamp out the lucrative Afghan drug trade, a major source of revenue
for the Taliban.
Some American officials argue that the reliance on Ahmed Wali Karzai, a central figure in the south of the country where the Taliban is dominant,
undermines the US push to develop an effective central government that can maintain law and order and eventually allow the United States to withdraw.
‘If we are going to conduct a population-centric strategy in Afghanistan, and we are perceived as backing thugs, then we are just undermining
ourselves,’ Major General Michael T Flynn, the senior American military intelligence official in Afghanistan, was quoted by the Times in an article
published on its Web site.
Ahmed Wali Karzai told the Times that he cooperates with American civilian and military officials but does not engage in the drug trade and does not
receive payments from the CIA.
Karzai helps the CIA operate a paramilitary group, the Kandahar Strike Force, which is used for raids against suspected insurgents and terrorists,
according to several American officials. Karzai also is paid for allowing the CIA and American Special Operations troops to rent a large compound
outside the city, which also is the base of the Kandahar Strike Force, the Times said.
Karzai also helps the CIA communicate with and sometimes meet with Afghans loyal to the Taliban, the newspaper reported.
CIA spokesman Paul Gimigliano told the Times: ‘No intelligence organization worth the name would ever entertain these kinds of allegations.’
CIA spokesman George Little declined to comment on the report.—AP
http://www.dawn.com/
