The federal government has decided to constitute the 11th National Finance Commission to finalise a new formula for distribution of resources, as the finance ministry disclosed on Tuesday that it spent Rs638 billion on subjects which, under the Constitution, are provincial matters.
The Rs638 billion spending in four provinces, Islamabad territory and special areas is exclusive of any development spending, indicating that a huge chunk of federal money is still pouring into provinces without any legal obligation.
For the first time, the Ministry of Finance made public a write-up covering current expenditures of the federal government on health, education and social protection subjects ahead of notifying the new commission.
The ministry said that these subjects stand devolved to the provinces with the enactment in April 2010 of the 18th Amendment. The amendment transferred several subjects from the federal legislative list to the provincial domain, effectively decentralising power and responsibility, and allowing provinces greater financial and legislative autonomy, it added.
The report revealed that the federal government spent a total of Rs638 billion in four provinces, special areas and Islamabad district in the last fiscal year on health, education and social protection. The amount was Rs36 billion higher than the preceding year, showed the report. The spending on the development projects were in addition to Rs638 billion, which the finance ministry did not disclose.
Meanwhile, during the April 28th meeting of the Council of Common Interests, the federal government informed the four provinces that it was in the process of establishing the 11th National Finance Commission to finalise the 8th award. It has already written letters to the provinces and sought their nominations for technical members.
Sindh has again nominated Dr Asad Sayeed as its technical member while the Sindh finance minister will be the other constitutionally-nominated member on the Commission. Under the Constitution, every government can have two representatives—one finance minister and one technical member.
The commission is set up for a period of five year and the 10th Commission is going to meet its term on July 23rd without finalizing the 8th award. The last award was finalised in 2010, which expired in 2015. Since then, the President of Pakistan has been extending the last consensus award every year on an ad-hoc basis.
The Khyber Pakhtunkhwa government pressed the federal government in the CCI to call the meeting of the 10th commission and announce an interim award, said Muzammil Aslam, the K-P's Finance Adviser to the Chief Minister while talking to The Express Tribune.
He said that the K-P government has not yet nominated its technical member for the 11th Commission due to the reason that it wanted the meeting of the 10th Commission before the budget to get its due share on account of net hydel profit and merged districts.
The finance ministry report has revealed how the federal government has been spending in provinces in areas which under the constitution are provincial subjects.
Under the 7th award, the provinces get 57.5% of the resources and yet the federal government has been spending money in provinces despite scarcity of resources. The government and four provinces signed a weak National Fiscal Pact last year under the IMF guidelines, which does not have legal cover.
Social Protection
In the last fiscal year, the federal government spent Rs466 billion on social protection, including Rs350 billion that was spent in four provinces, according to the Finance Ministry.
The federal government disbursed Rs169 billion in Punjab under the BISP, Rs96 billion in Sindh, Rs67 billion in KP and Rs18 billion in Balochistan, according to the report. In addition to that it also 7.4 billion through Pakistan Bait-ul-Mal, an autonomous body contributing to poverty alleviation, said the Finance Ministry.
Health
In the health sector, Rs45 billion were spent in the last fiscal year on current programmes. These included Rs12 billion spent on employees, another Rs12 billion on operations and Rs21.3 billion on Expanded Programme on Immunization.
The Finance Ministry said that the Expanded Program on Immunization (EPI was running since 1978 to protect children against vaccine preventable diseases. However, the virus spread could not be controlled since then. Rs11.2 billion were spent in Punjab under the EPI, Rs5.1 billion in Sindh, Rs1.2 billion in KP and Rs3.5 billion in Balochistan.
Some of the health expenditures were related to Islamabad Capital Territory (ICT). An amount of Rs5.2 billion was spent on Pakistan Institute of Medical Sciences (PIMS) and Rs4 billion on the Federal Government Polyclinic (FGPC).
The expenditure of the Federal Government on health also covers the National Institutes of Health (NIH), an institution involved in multi-disciplinary public health related activities like diagnostic services, research and production of vaccines as well as the National Institute of Rehabilitation Medicine (NIRM) which serves people with special abilities
Budgetary allocation is also made for the Federal Government run Shaikh Zayed Hospital, Lahore, a hospital gifted for the people of Pakistan in 1973 by the then president of the UAE, Shaikh Zayed bin Sultan Al-Nahyan. The federal government spent Rs4.9 billion on Shaikh Zayed hospital.
The funds were also allocated for the administrative costs of the Ministry of National Health Services, Regulations and Coordination. The actual expenditure of the ministry was Rs3.7 billion in the last fiscal year.
Education
The Finance Ministry stated that Rs114 billion were spent on education in the last fiscal year, majority of it in the provinces.
The largest chunk of the federal government expenditure on the subject of education is earmarked for higher education and is disbursed to the Higher Education Commission (HEC) in the form of grants.
An analysis of this expenditure highlights that in fiscal year 2023-24 around 16% of funds were disbursed by HEC to universities and institutes in ICT, AJK and Gilgit Baltistan while the remaining funds were allocated for universities in provinces, said the Finance Ministry.
Punjab related federal education spending amounted to Rs31 billion, in Sindh it was Rs15 billion, Rs11.6 billion was spent in KP and Rs3.7 billion on education in Balochistan.
The Finance Ministry said that the funds were also kept for the Action to Strengthen Performance for Inclusive and Responsive Education (ASPIRE) Program of the World Bank and Rs8.6 billion was spent under this head in the last fiscal year.
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