Abstract
This paper examines the evolution of revenue and expenditures decentralisation in Pakistan. Major issues regarding the financial distributions and expenditures obligations of both federal and provincial governments are discussed in details. Fiscal decentralisation in Pakistan has been a contentious issue and hot topic of debate. The central government has always been criticized for over centralization of revenues. It collects the majority of tax and non-tax revenues and transfers a part of it to the provincial governments through the National Finance Commission (NFC) Award. A thorough look at the history of resource distribution suggests that the process of fiscal decentralisation has been less systematic and failed to pace with fiscal and administrative demands of the provincial governments. There have seven NFC Awards after independence, and with the exception of 1974 Award, the trend shows a consistent increase towards fiscal decentralisation. Albeit since 1990 NFC the process of decentralisation has got momentum, yet, a quantum jump towards true fiscal decentralisation is represented in 7th NFC, concluded in 2009. It rationales the intergovernmental fiscal relations, expands the divisible pool by bringing more taxes into its orbit and increases the provincial share and more importantly includes more criteria other than population for horizontal - 2 - distribution. As a result the financial position of the provinces improves and gives them a significant autonomy.
Dr. Manzoor Ahmed, Ms. Latifa Kamal. (2014) The Political Economy of Fiscal Decentralisation in Pakistan: A Historical Perspective, Balochistan Review, Volume 1, Issue 1.
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