Government proposes 4% deduction from gross FDP for national security  

Government proposes 4% deduction from gross FDP for national security  

ISLAMABAD: (APP) The federal government has proposed seven per cent deduction from gross Federal Divisible Pool (FDP) to be allocated for national security issues (three per cent) and socio-economic development of Federally Administered Tribal Areas (FATA), Gilgit Baltistan and Azad Jammu and Kashmir (four per cent), Minister for Finance Muhammad Ishaq Dar said here on Monday.


Talking to media persons after chairing a meeting on National Finance Commission, Ishaq Dar said that the government was planning to establish National Security Fund (NSF) to meet expenditures for overcoming future security challenges the country was likely to face and the share of FDP would be allocated for the Fund.


He said Council of Common Interest (CCI) would decided about the disbursement of this fund.


He said another summary that was presented before the meeting proposed additional three per cent deduction from gross FDP for socio economic development of Federally Administrated Tribal Areas (FATA).


"The government had formed a reforms committee on FATA which held a number of Jirgas under the constitution and came with various proposals including giving special focus on development of FATA and main streaming and integrating the area with the rest of the country", Ishaq Dar said adding in order to implement the above proposals, a sizable fund would be needed.


He said that since 2014-15, when the new security operation started, the federal government has spent over Rs 300 billion specifically for meeting the expenditure related to security, rehabilitation and capacity building of security forces to meeting the challenges of law and order.


He also explained that though the Federal Government was providing funds to special areas, however, their financial needs were increasing year on year.


The summary, he said also proposed to allocate additional funds for the development of Gilgit Baltistan and Azad Jammu and Kashmir (AJK) therefore the total deduction should be enhanced from three to four per cent.


He however was of the view that the detail of the breakdown of funds from this four per cent would be made in a few days.


He informed that the next meeting of NFC to be held next month would consider these proposals.


Meanwhile a press release by the finance ministery said the provincial representatives desired that they should be given time for deliberation and consultations, so that they may come up with appropriate reply to the recommendations, which was accepted.


It was also desired that the Federal Government may put forth a complete set of proposals i.e. details and modalities, for use of fund and allocation, particularly related to Special Areas.

The Finance Minister hoped that the 9th NFC award would be completed before the up coming federal budget.


To a question, Mr Dar explained that the proposed cut in size of gross divisible pool would not impact the existing share of provinces (57.5%) and federal (42.5%) but this cut would be made before sharing it to the provinces and the federal government.


Regarding population and housing census, Ishaq Dar reiterated his resolve to hold the sixth population and housing census on March 15, 2017.

He said the census would be conducted in two phases and it would be conducted in all provinces simultaneously.


He added that by use of latest information technology tools, it would be ensured that there was no duplication due to conducting of the census in two phases.


To a question, Senator Saleem H. Mandviwala, former federal finance minister said the Sindh government had demanded the federal government to give the provinces share of sales tax on goods as well.


The meeting was also participated by the Members of the Commission namely Dr. Aisha Ghaus Pasha, Finance Minister Punjab, Said Muzaffar Advocate, Finance Minister KPK, Senator Saleem Mandviwala, Member Sindh, Prof. Muhammad Ibrahim Khan, Member KPK, Dr. Kaiser Bengali, Member Balochistan and Dr. Ali Cheema, Member Punjab.