Stashing provincial shares without amending Constitution
The army has either taken out the terrorists or made them flee. But it is yet to complete the costly fencing of the Durand Line. What’s more it is keen to cover what it perceives as its vulnerabilities in defence requirements against India. Funds are needed for the development of tribal areas of erstwhile FATA and also for Gilgit Baltistan and AJK. The demand to rebalance the consolidated share of provinces and the center has also come from the IMF.
The government could raise funds by tapping three sources. It could improve the performance of the FBR and enlarge the tax net by including the big trading community and thousands of those who make multiple foreign trips every year, possess costly cars and live in upscale localities but fail to pay taxes. Political exigencies stood in the way of PML-N government to take the course as they do now in the case of the PTI administration. Instead of getting rid of the white elephants like the PSM along with at least 35 other public sector entities, PTI went for a nebulous scheme to revive the PSM fearing a loss of popularity if it went for privatisation. Lack of capacity is responsible for the failure to reduce government expenditure and save billions through improving governance, and thus cutting the power line losses and making all consumers pay. The same shortcoming has hindered raising of funds through the growth of exports.
While there are pressures to reduce the share of the provinces in the NFC award, the provinces are presently unwilling to accept the adjustments being suggested. To preserve the spirit of fiscal federalism there is a need for creating a consensus over the issue. One had hoped that the PM who enjoys the full support of those who matter should have developed enough confidence to offer talks to the opposition over the issue. It is surprising that he continues to entertain an irrational fear of a possible NRO for the opposition leaders from the powers that be. It is time the PTI leadership sheds its scruples and initiates parleys.