Whither fiscal autonomy?


Karachi: The 7th NFC Award brought political rewards, but missed the development goals of devolution by a big margin.

The failure in the development sphere is clearly more pronounced in Sindh and Balochistan, where social indicators have actually worsened or improved lesser than the national average since 2010.

The last landmark award did improve the relationship between provinces and dissipate the tension between the centre and the federating units, which had marred the country’s polity for decades.

“We actually gave incentives to provinces to pay the same interest rate that the SBP gives on T-bills if they deposit resources in the consolidated account for three months,” said a federal government official.

It rendered the 18th constitutional amendment — which devolved administrative and legislative powers — more meaningful by equipping the provinces with improved financial capacity to match their new responsibilities.

The arrangement should have led to a visible improvement in the quality of governance in the country. The people struggled for provincial autonomy because they expected the provincial governments to be more caring.

Except for Punjab, which was already relatively ahead of others, there is little evidence to suggest a concerted effort to ensure improved access to social and physical infrastructural facilities for the people by the rest of the provincial governments.

Even Punjab failed to carry forward devolution by constituting a provincial finance commission and financially strengthening districts for better choices and implementation of development projects.

Pakistan in the past four years was not able to improve the general well-being of citizens, as indicated by the progress on the Millennium Development Goals. The quality of fiscal discipline and efficiency at the provincial governments did not improve significantly.

Pakistan is set to miss targets for key social indicators: reduction in poverty, universal education, health coverage, gender discrimination and environmental degradation.

Provincial government representatives hinted at their inability to fully meet the challenges of the additional responsibility after the 7th NFC Award and the 18th Amendment, but also blamed the fiddling of the federal government in their financial affairs for the unsatisfactory outcomes.

“They give money with one hand and try to snatch it with the other,” a senior official from KP told Daily The Pak Banker.

“If you look deeper, you can...

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