Centre pulls the plug on finances for devolved subjects

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Having devolved a number of subjects to the provinces, the Federal government has refused to fund any uplift scheme being built under the federally-funded Public Sector Development Programme (PSDP) 2011-12 for these subjects, Pakistan Today has learnt. The federal government had previously agreed to provide full funding for these projects till they were completed, but the decision has now been retracted, sources told Pakistan Today. This has put the Sindh government into a spin, with Chief Minister’s Advisor on Planning and Development, Kaiser Bengali, calling an emergency meeting on Wednesday at his office to chalk out a strategy to find finances for these schemes.
“The bureaucracy, after the 7th National Finance Commission (NFC) Award and the 18th Constitutional Amendment, has been trying to pressure the provinces to soften their stance on many issues,” sources alleged. “This has resulted in a stand-off between Sindh’s ministers and advisors as the Islamabad-based bureaucrats.” The non-inclusion of any scheme initiated by ministries now devolved will disturb the financial matters of the provinces, simply because ongoing schemes are supposed to be completed by the Centre, sources explained.
Sindh’s financial experts, at a meeting held on January 29, 2011, had in fact asked senior officials of the Ministry of Finance to ensure that funds for at least five years of the devolved subjects are made available, so that their affairs may be run without any hindrance. The federal government, however, refused to provide any money to the provinces for the devolved ministries. A Council of Common Interest (CCI) meeting was summoned later on, which was chaired by Prime Minister Yousaf Raza Gilani and attended by all four provincial chief ministers. At the CCI meeting, it was decided that Centre would continue to provide funds till such time that development schemes of the devolved ministries are completed.
“Despite the agreement at the CCI meeting, the provinces have now been informed that not a single paisa is being allocated in the upcoming PSDP 2011-12,” sources said. The provinces have been demanding suitable budget for multiple years for the devolved ministries, which is why the second phase, in which the five ministries are to be transferred to the provinces, is being delayed. A number of new issues are also being created – the Higher Education Commission (HEC) is a case in point, sources said. The federal government wanted to hand over the departments without financial powers, but the provinces’ position is that such a strategy would be detrimental for them and that they were not willing to only accept liabilities.