Federal Finance Secretary Imdadullah Bosal stated that after the 18th Constitutional Amendment, more funds were transferred to the provinces, and there is a need to review the Revisiting NFC Award post 18th Amendment.
He expressed these views during a briefing to the Senate Standing Committee on Finance. The meeting, chaired by Senator Saleem Mandviwalla, was held at the Parliament House in Islamabad.
During the meeting, Pakistan Tehreek-e-Insaf (PTI) Senator Shibli Faraz questioned when the concerns of the provinces regarding Revisiting NFC Award post 18th Amendment would be addressed.
Senator Shibli Faraz emphasized that increased developmental funds in less developed areas could help curb extremism and that Khyber Pakhtunkhwa requires additional funds.
Finance Secretary Imdadullah Bosal informed the meeting that the funds available with the Ministry of Finance are distributed among the provinces. If the population or formula figures of a province change, a new agreement would need to be formulated. He remarked that the government at the time should have amended the NFC Award, and he maintained that revisiting the NFC Award is essential.
He revealed that the implementation of the 7th NFC Award is still ongoing. The government wanted to eliminate the privileges of FATA and PATA, but this was not accepted. He clarified that the IMF has not imposed any conditions regarding changes to the NFC Award and that consultation with the provinces is necessary for any changes.
Imdadullah Bosal further stated that the provinces contribute only 1% to the tax-to-GDP ratio. Provinces have been requested to reduce expenses and share the costs of the Benazir Income Support Program (BISP) and the Public Sector Development Program (PSDP). Efforts are underway to achieve consensus on joint financing with the provinces.
During the meeting, Senator Shibli Faraz remarked that media reports suggest the government has taken on very expensive loans. He questioned whether Pakistan would only repay commercial loans.
The Finance Secretary responded, saying, “We have not taken any expensive loans so far. When we take loans from banks, it will be in front of everyone. Our external deficit has been covered, and we will take more loans on our terms.”
He added, “The 6-month KIBOR rate is currently 12%. When asked why the global market is not being approached if the situation has improved, he explained that Pakistan cannot issue bonds with a triple-C rating. Currently, there are no difficulties in debt repayments.”
The committee was also briefed by Finance Minister Muhammad Aurangzeb, who stated that there is no proposal under consideration to reduce the retirement age of employees to 55 years.
The Chairman of the Federal Board of Revenue (FBR) clarified that recruitments in Pakistan Customs have been made on merit. “We did not recruit for grades 1 to 4, and recruitments for grades 5 and above were done on merit.”
The President of the Agricultural Development Bank informed the meeting that agricultural loans of PKR 124 billion were given in Punjab and PKR 23 billion in Sindh, while Khyber Pakhtunkhwa received loans amounting to PKR 5.3 billion this year.
Senator Mohsin Aziz stated that Khyber Pakhtunkhwa is being treated unfairly. Shibli Faraz added that the Agricultural Development Bank was established to support small farmers. In response, the Bank’s President explained that loans are provided based on the cultivated area. Since Punjab has more cultivated land, it received more loans.
Finance Minister Muhammad Aurangzeb added that the State Bank will brief the committee on agricultural loans and inform them about the loan disbursement mechanism.