Few days ago it was declared by the finance ministry that provinces from the next fiscal year won’t be getting any share from the federal PSDP because the NFC had decided to increase the provinces’ share from the federal pool. Provinces had earlier accepted. Now that the decision was passed formally few days ago, panic struck!
http://www.dawn.com/2006/04/24/top1.htm
With such attitude from the provincial leaderships, could the concept of ‘provincial autonomy’ be taken forward at all…?
Re: Dispute over federal funds
Haris, have you done your homework on the topic?
Re: Dispute over federal funds
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“The provinces are victims of selective memory,” said the source, adding that provinces were satisfied with the increase in share in the NFC but forgot that they had agreed to stop seeking funds from the Public Sector Development Programme (PSDP) if their share in the federal divisible pool was increased.
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This source should simply post the agreement where provinces accepted the cancellation of PSDP.
Bottom line: Provinces shouldn’t be begging the center for few rupees. They should ask the center to allow province raise their own taxes.
This will also help in improving federal tax collection through streamlining process.
Re: Dispute over federal funds
Cancellation of PSDP was agreeable to Provinces when the Centre was ready to give 55% of the FDP to Provinces in vertical distribution and ofcourse when the NFC was finalised.
Provinces are not begging. They generate resources and Federal Government plunders their resources.
Re: Dispute over federal funds
I believe the exact ratio of tax collection in Pakistan is around 88% of all taxes are federally collected and disbursed with a large chunk lost through corruption and a commission..10% are collected by the provinces and 2% by local government.
Re: Dispute over federal funds
Tax system is in bad need of complete overhaul. Current taxation methods are 200 years old (just like FATA system). Both of these obsolete systems should completely by demolished and replaced with new more streamlined versions.
Tax assessment or collection should be done by NADRA like agency.
FATA should be replaced by Khattak province (or brought under Peshawar's control).
Re: Dispute over federal funds
Cap, with ref to what exactly?
If youre talking about whether I'm sure provinces had earlier agreed and have a source to prove, then I'm as clueless at the moment as anyone else as to what had actaully happened earlier and when?
If youre talking about my comment on provincial autonomy in this context; the reason I pointed that way was due to the fact that this issue is a glimpse of how federal-provincial administrations function here. Things could be more complex when talking about legal, political, energy etc related issues. More so with autonomy once granted I guess...
Re: Dispute over federal funds
I disagree with that Haris..by “granting” ( i don’t like the word granting when used by the government..it implies it’s a gift to be autonomous is a right) autonomy one removes most obstacles the provinces are left to their own devices on most issues relying on the federal government only to uphold its commitments on federal transfers and federal co ordination.
ONCE again the provinces and the centre are at loggerheads over the question of resource sharing. This time they are not fighting over who would share how much from the divisible pool, because that has already been settled for the time being. What is at issue today is whether or not the provinces qualify for allocations from the Public Sector Development Programme (PSDP) after their share in the divisible pool has been increased. The federal government claims that the provinces had agreed to give up their PSDP shares as a trade-off for the increase in their share from the divisible pool. The provinces dispute this claim. Indeed, the claim does not appear to hold water when viewed against the situation on the ground. How could the provinces have agreed to trade off Rs 68 billion (the current year’s allocation from the PSDP) for Rs 52 billion, the increase in their share from the divisible pool? It appears as if the centre by turning off the PSDP tap is trying to take back from the provinces more than what it has given to them by way of an increase in their share from the divisible pool.
The federal government raises and administers revenues of the state to the tune of 95 per cent and the provinces less than five per cent. At the same time, it exercises power and authority over some 47 subjects under the concurrent list of the Constitution, thereby severely undermining the principle of federalism. Recognising this structural imbalance, the president had himself come out with a statement on February 22, 2005, advising the federal government to transfer the subjects included in the concurrent list to the provinces and to share resources on a fifty-fifty basis. But when the award was announced this structural imbalance in the power and rights of the provinces and the federal government was not taken into account.
Not only this, the centre by not resolving other contentious issues like the sharing of gas development surcharge (GDS) in the case of Balochistan and the hydro-power profit in the case of the Frontier has also kept these two economically underdeveloped provinces poor, making them live on subventions and overdrafts. The formula given by Senator Dilawar Abbas for sharing of GDS equally by the provinces producing gas had received universal acceptance, but it has remained confined to files creating doubts among the people of Balochistan as to the sincerity of the federal government in conceding to the province its legitimate share.
On the other hand, Justice Ajmal Mian’s committee which had been assigned the task of reinterpreting the A.G.N. Kazi formula of sharing of hydro-power profit is taking a long time to finalise its report forcing the NWFP to continue to live on borrowed money. In the meantime, the federal government could have come up with an interim award pending the final report of the committee in order to ease the financial burdens of the province. All this has heightened provincial disharmony and given rise to an acute sense of deprivation in the smaller provinces. The sooner these problems are resolved in accordance with the principle of equity the better it would be all around. Or else, the problem of disparity could widen, creating strains between the centre and the provinces and among the provinces themselves.
Re: Dispute over federal funds
^Yes perhaps you're right Zakk, 'granting' could be replaced with 'accepted' or 'agreed'...meanwhile as far as the whole concept of autonomy is concerned, I think theoretically there could be many advantages like you mentioned, I dont oppose it, i'm just a little paranoid about how it might work practically on a daytoday basis, I hope if and when a decision is made we get a good exmaple of smooth functioning.
Re: Dispute over federal funds
Giving power back to the provinces is the most logical and just thing to do. It should not be a question of if, but when and how soon. But the ruling elite sitting in the federal government simply wants to horde all power for itself. A 10 year child would understand that the province generating revenue from gas, hydro-power, taxes etc. should retain majority of this revenue, and not have to beg the fed govnt for its own money!
Re: Dispute over federal funds
unfotunately despite musharrafs supposed support fot autonomy he has actually overseen the biggest decline in provincial autonomy by taking the pdsp away from the provinces and empowering the districts without doing the same to the provinces he has undermined political , financial and administrative autonomy.