There is an ensuing discord between the federation and one of its units over fiscal budgeting, and unfortunately it is aggravating into a crisis. The issue pertains to a commitment with the IMF that provincial governments will jointly provide Rs750 million cash surplus to the Centre. Khyber Pakhtunkhwa in principle agreed to the international pledge of the federal government, and the subsequent talks with the donor led to an agreement wherein $1.27 billion would come Pakistan’s way by the end of August. So far so good.
The spanner in the works apparently is the loud thinking on the part of K-P, which is badly hit with monsoon deluge and is in a state of shock and awe. Now Peshawar believes that it would not be in a position to implement the IMF loan precondition for the surplus budget, and has cited non-payment of arrears of around Rs100 billion by the federal government. This has pushed the accord with IMF to the cliff, and an absence of truce between Islamabad and Peshawar might lead to delay or roll-back of IMF tranche.
The issue is in need of being looked solely in financial fiefdom, and politics kept at bay. K-P’s concern cannot be brushed aside under provincial autonomy. Likewise, the federal government has no recourse but to iron out the statistical fudging instantly with the province. Reconstituting the National Finance Commission Award, agreeing anew to transfer net hydel profits to the province, and sorting out bureaucratic intrigues in energy equation disbursal as per Article 158 can get going. An immediate joining of heads of respective financial wizards is a must to send down a message of unanimity to the lender.
K-P would have done better had it addressed the issue of its constraints behind the curtain with the federation. Talking through media and making public the note of dissent has posed questions on Pakistan’s credibility of honouring accords. To further complicate the issue is our culture where politics reigns supreme over national interests. K-P and the Centre should address it as a financial correction, and not as one of ego-centrism.
Published in The Express Tribune, August 28th, 2022.
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