Islamabad seeks to transfer all of ministries’ liabilities as well

Finance ministry opposes delegation of ministries’ employees to federation’s surplus pool.

ISLAMABAD: The ministry of finance has refused to let the federation finance the debt obligations of the five ministries that are due to be transferred to the provinces under the 18th amendment.

The ministry has also said that all employees of these ministries will be transferred to the provinces’ payroll but the federation will provide a grant to provinces for these ministries.

The ministries include those for health, education, culture, tourism and local government and rural development.

Provinces had earlier suggested that the employees of these ministries be sent to a surplus pool and that the federation pays off the ministries’ debts.

A senior officer of the ministry of finance told The Express Tribune that a meeting of the committee for the implementation of the 18th amendment was held yesterday under the chairmanship of Senator Raza Rabbani. The committee included Minister for Finance Dr Abdul Hafeez Shaikh, Minister for Petroleum and Natural Resources Syed Naveed Qamar, Planning Commission Deputy Chairman Dr Nadeemul Haq, the secretaries of the cabinet and establishment divisions and the chief secretaries of each province, amongst other officials.

Sources said that during the meeting, the provinces proposed that employees of these ministries be delegated to a surplus pool, that the federation pays off all debts of these ministries and that the federation provides the provinces with grants for these ministries. The provinces also requested the transfer of funds allocated for projects under the ministries’ jurisdiction.

According to sources, the minister for finance told the provinces to consider the country’s delicate financial position and said that since the provinces are getting additional funds under the National Finance Commission Award at the expense of the federation to manage their own affairs, the provinces must also share the country’s expenditure.

The meeting also discussed the fate of public servants employed by these ministries but could not reach a consensus on the issue due to opposition from the ministry of finance.

The ministry of finance pointed at the fiscal deficit to Gross Domestic Product target ratio of 4.7 per cent and argued that if the federation were to take responsibility for paying off these ministries’ debt and add the employees to the surplus pool, then the target will never be met.

The next meeting of the committee has been called on November 15 and will discuss the same agenda.

Published in The Express Tribune, November 10^th, 2010.