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EDITORIAL: The federal government has refused to release more funds for remodelling of the Warsak Canal System in Peshawar and Nowshera districts until the Khyber Pakhtunkhwa government fulfils its part of the financial obligations.

The Centre had already contributed funds to the tune of Rs 4.971 billion by June of last year as against the provincial government’s Rs 237.707 million only. Meanwhile, work has remained stalled pushing the cost further up. Another cause of the delay is the poor management of the project.

The Ministry of Water and Power has raised objections over its design and some other issues, demanding an inquiry against the project consultants. Bungling and blundering in this and any other such shared projects have prompted the Ministry of Planning, Development and Special Initiatives to come up with several proposals for the approval of the Executive Committee of National Economic Council (ECNEC) that, among other things, require making executing agencies responsible for rationalising costs and validity of design and construction methodology.

This though is not the only case of poor management of a development scheme jointly undertaken by the federal government and a province which has run into trouble. In Sindh, for example, the metro bus project has taken forever to be completed.

The ruling parties in the provinces expect the Centre to help them with development schemes, and yet they bristle at any suggestion for governance reforms, pointing to the 2010 passage of the 18th Amendment that brought them greater autonomy and enhanced financial independence. Indeed, consequent to the amendment decentralisation of the federal structure has created a much-needed balance and harmony between the federating units.

Arguably, its most important aspect is redesigning of the National Finance Commission (NFC) Award. The provinces’ share in the federal divisible pool has increased from 45 percent to 57.5 percent.

Also, the criteria for horizontal distribution of revenues previously based on population with lion’s share going to Punjab — and causing heartburn in smaller provinces — has been revised using multiple criteria such as backwardness, contribution to the national exchequer as well as inverse population density — particularly important for the thinly-populated and the most disadvantaged province of Balochistan. The amendment also gives the provinces control over their natural resources. Still, they want more.

The federal government has wanted to devise a mechanism to hold the provinces accountable for how they spend the monies they get from the divisible pool. That surely is unacceptable to them, but perhaps it may not be such a bad idea considering that it’s been more than 11 years since the 18th Amendment came into effect. During this period, the provinces have failed to build their respective capacities for proper utilisation of their respective shares of the NFC Award and deliver for their people. In any case, a serious effort for the reform of their financial governance is in order.

Copyright Business Recorder, 2021

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