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ates to the issue of political economy and public choice. Our electoral system can bring about such a state in which the federal government can be taken over by the larger province due to its majority seats in the National Assembly. Although, in Senate all provinces have equal representation but Senate has power only to discuss on the policy matters, but the decision making right resides with the National Assembly. So it is the National Assembly who has the constitutional supremacy to devise a reasonable resource sharing formula. Furthermore, the federal government does not want to give up its powers to provinces and let them grow autonomously as it will reduce their control on policy matters. This could be seen as since independence, 10 awards have been recommended for justified resource sharing between the center and provinces, but out of them only 3 (1974, 1991, and 2010) initiated by elected governments. The most significant development of the year 2010 was 7th NFC award which brought about some innovation in the revenue sharing criteria. After the independence of Pakistan, It was for the first time that a diversification was brought in the revenue sharing mechanism and some other factors were taken into account with population, like backwardness/ poverty, area and revenue collection. The long-ignored demands of provinces were accepted. With a long history of inconclusive awards, 2010 conclusive award under the democratic government is an achievement in itself. It was a significant accomplishment in the way to fiscal decentralization. The provincial share from the divisible pool increased from 47.5 percent to 56 percent in the first year and 57.5 percent for all the remaining years of the award.

 

The resource distribution in Pakistan has improved progressively. Although the tax-to-GDP ratio in Pakistan is the lowest in region [Sherani (2006)]. But the tax collections have been increasing gradually and so does the revenue pie. That is why the revenue transfers from center to provinces are increasing.

 

3. MAJOR ISSUES IN RESOURCE TRANSFERS OF NFC

 

We can see a signal of hope and improvement in the resource transfers of the most recent NFC award (2010) but the trend in the resource transfers calls for a serious attention towards certain issues and weakness in the fiscal transfer. NFC was supposed to make rational and fair revenue distribution between the center and provinces. But the long-ignored problems and weaknesses in its fiscal arrangement hindered its development overtime. In this section, we will analyze these issues and their consequences.

 

Vertical Imbalance

 

The major problem in our revenue collection and transfer method is vertical imbalance between the center and provinces. Provincial governments collect some taxes which Federal government does not collect itself. The most valuable tax collections reside with the center, like sales tax, income tax, wealth tax, import duty, export duty, and excise duty. The 本论文由英语论文网提供整理，提供论文代写，英语论文代写，代写论文，代写英语论文，代写留学生论文，代写英文论文，留学生论文代写相关核心关键词搜索。