ISLAMABAD - PRIME Institute, an Islamabad-based economic think tank has welcomed holding of first meeting of 9th reconstituted NFC hoping that the federal government and federating units would rekindle the consensual spirit of the 18th amendment and 7th NFC award for resolving issues at the meeting. In a statement, the PRIME institute said since 2010, economy of Pakistan has increased by three-fourth to $313 billion, whereas increase in population is just 17 percent to 207 million in 2017. It effectively means that per capita income has increased, though not to the extent in regional comparison, it added. PRIME Institute was of the opinion that the 6th most populous country required more fiscal devolution than less to spread the fruits of economic growth among broader population. “Provinces were supposed to constitute Provincial Finance Commission for formulating resource distribution till district level. However, with few exceptions, it seems that prevalent centralization mindset at provincial level has constraint further fiscal devolution," Zia Banday said. Impact of this approach is evident from under-spending of development funds by the provinces. Despite availability of additional funds, provincial machinery lacks the capacity of planning and implementing more development schemes. As per a study by an economist, Dr Nadia Farooq, socioeconomic provincial impact of 7th NFC award has remained weak in terms of primary education and healthcare footprint. Federal government is making a case for reduction of the provincial share in the divisible pool on account of higher security and other backward areas development-related expenditures. Provinces are expected to contest and resist any such decrease. And the task seems difficult for federal government in owing to constitutional protection for resource distribution formula. However, it still has the space available for tweaking with revenue streams in the divisible pool, which will reduce its size without disturbing the provincial share. Responsibility lies on both federal and provincial governments to make this NFC mechanism of fiscal federalism more meaningful and productive for the citizenry of Pakistan. Principle of subsidiarity, whereby central government should only undertake functions that cannot be taken up at more local level, may facilitate in constructing an effective and efficient outcome, the statement added. Bulk of the revenue collection will be more efficient at central level, whereas expenditure management can be more effective at lower tiers. In the spirit of fiscal devolution, federal government has to decrease its load of functions and expenditures. On the other side, provinces need to engage local governments for spending allocations and development initiatives. In this manner, the polity of Pakistan will become more strengthened with the infusion of the inclusion spirit at grassroots level.