ISLAMABAD: Dr Abdul Hafeez Shaikh, who had recently been removed from the newly-constituted National Finance Commission (NFC) after objection from provinces and political parties, would now be chairing the NFC meeting after becoming federal finance minister.
As per the new composition of NFC, Prime Minister Imran Khan was supposed to chair the meeting as the minister in charge.
However, according to an official source, the premier, during the past five months, had chaired only a meeting with concerned officials of the finance ministry.
As the Finance Ministry had prepared a summary for the meeting of NFC under the chairmanship of the prime minister, only a department meeting was held so far in which the premier was briefed about the NFC and related issues.
Earlier a summary related to the same meeting was revised multiple times to confusion related to the new body of NFC.
Dr Abdul Hafeez Shaikh was sworn in as a federal minister on Friday. Shaikh assumed office as the SAPM on April 20, 2019; his appointment comes in light of the Islamabad High Court’s (IHC) December 7 ruling on the inclusion of special assistants and advisers to the prime minister in cabinet committees.
The IHC had ruled that special assistants and advisers to the prime minister were not members of the Cabinet and therefore, cannot be part of Cabinet proceedings.
Shaikh’s appointment as a federal minister is a rarity since he is not an elected member of the parliament. The notification of his promotion cites Article 92(1) read with 91(9) of the Constitution as the basis of his appointment.
“The government, as per the constitution, needed to make Shaikh as member of the parliament within next six months. It is expected that Shaikh will be made senator during the election of senate in March 2021,” said an insider. In April 2018, the government of PML-N had also promoted Miftah Ismail from adviser to finance minister under Article 92 of the constitution.
According to sources the late Benazir Bhutto was the only prime minister who chaired NFC meetings as the minister in charge. The meetings are normally chaired by finance ministers.
Since the constitution does not allow advisers to chair the meeting, Pakistan People’s Party (PPP) and Pakistan Muslim League-Nawaz (PML-N) had strongly objected to the composition of the 10th NFC, in which the adviser on finance was empowered to chair the meeting.
On July 22, 2020, Shaikh was removed from the chairmanship of the commission after opposition from provinces and Balochistan High Court’s (BHC) verdict against the composition of the NFC.
It may recall here that in the last 10 years, the Centre and provinces have failed to reach a consensus which led to both the eighth and ninth NFCs being inconclusive, and the extension of the revenue distribution mechanism set in the seventh NFC Award, which was given by the PPP in 2010.
According to sources, the provinces are also largely in favour of keeping the mechanism of seventh NFC intact, as they are wary of changes in their respective shares due to demographic fluctuations identified in the latest population census.
The 7th NFC Award, after a thirteen-year gap, became effective under PPP’s rule in 2010-11. The NFCs that followed remained indecisive. The award’s noticeable features include the vertical increase in provincial share to 56 per cent in the first year and to 57.5 percent thereafter.
Under the fiscal mechanism in the 7th NFC Award the federation withholds too little, compared to its colossal needs and financial commitments, forcing it to run a deficit. The federation has to service unilateral and bilateral debt after distributing the due shares of the provinces. The debt servicing only leaves behind a sum that finances a part of the military budget. Non-tax revenue and additional loans fund the remaining expenditures.
