7th NFC’s social blessings

In an unprecedented meeting held this week between the Prime Minister and the Chief Justice of Pakistan, it was agreed that all steps would be taken to achieve the vision of the chief justice with respect to free education, provision of quality and affordable health services, revamping of medical education, provision of clean drinking water, better sanitation and environmental protection. Sounds great, except that both sides have nothing really to do with resourcing and delivery of these vital services. After the 18^th Amendment, all these services fall in the jurisdiction of the provinces and their resourcing is dependent on how the provinces prioritise their enhanced share in the federal divisible pool under the 7^th NFC award.

On environment/water supply and sanitation, the provinces spent Rs25.2 billion in 2009-10, the year before the 7^th NFC award came into effect. By 2016-17, the expenditure went up to Rs70.1 billion, or by 278 per cent. During the same period, the expenditure of the provinces on education rose from Rs213.1 billion to Rs591.2 billion, or by 277 per cent. The expenditure on health experienced the highest jump. From the pre-NFC amount of Rs71.2 billion, the provincial expenditure on health touched Rs282.1 billion, an increase as high as 396 per cent. The quality of these expenditures and the outcomes produced may be a matter of debate, reflecting the state of governance in the respective province. However, the first step to deliver a service is to allocate enough resources. This is what the provinces seem to be trying, thanks to the 7^th NFC award. But for this award, the expenditure on these basic services would have been lower by 20-25 per cent. Even this level of expenditure is not enough, given the massive social deficit. The total comes to a mere three per cent of the GDP in 2016-17 compared to 2.1 per cent in 2009-10, well below the prescribed international norms.

Any move to increase the federal share again will be a major setback to the social sector. Article 162(3A) inserted as part of the 18^th Amendment specifically debars it. It states: “The share of the provinces in each award of the National Finance Commission shall not be less than the share given to the provinces in the previous award.” This is why the next NFC award has been delayed. If there is a role of judiciary in improving the access and quality of social services, it is right here in restraining the federal government and institutions from reducing the flow of resources to the provinces. In the Constitution, the provision of most social services falls under the ‘Principles of Policy’. Article 29(2), however, puts a rider: “In so far as the observance of any particular Principle of Policy may be dependent upon resources being available for the purpose, the Principle shall be regarded as being subject to the availability of resources.” All efforts should, therefore, be directed towards eliminating the obstacles to legislate and execute the much-delayed tax reform. What flows in the kitty is way below the potential.

Elementary education is different. Article 25A places it under the fundamental rights: “Right to education — the state shall provide free and compulsory education to all children of the age of five to 16 years in such manner as may be determined by law.” It is enforceable like any other fundamental right, without being subject to the availability of resources. Some judicial activism here might hasten the process of putting 25 million out-of-school children in the schools.

Published in The Express Tribune, March 30^th, 2018.

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