Centre can save Rs6trn by ‘fully’ implementing 18th Amendment: panel

ISLAMABAD: A parliamentary panel said on Monday the federal government could save Rs6 trillion annually by cutting its remit, devolving provincial functions and fully implementing the 18th Amendment.

The Senate sub-committee on devolution, chaired by Zamir Hussain Ghumro, examined the downsizing of the federal government and the constitutional mandate of the Council of Common Interests (CCI).

The committee noted that the federal budget for the 2026-27 financial year stood at approximately Rs19 trillion, against total national tax and non-tax revenue of around Rs20 trillion.

It said the size of federal expenditure was unsustainable and described the continued retention of provincial and Council of Common Interest-related (CCI) functions by the federal government as “hemorrhaging money”.

The committee said its review of ministries’ responses showed that the federal government had failed to fully implement the 18th Amendment and recommendations of the Implementation Commis-sion.

It said that ministries and institutions had been retained despite constitutional provisions requiring the devolution of subjects transferred to the provinces.

According to the committee, the federal government should immediately abolish or devolve bodies and ministries dealing with subjects such as health, education, food security, climate change, housing, culture, railways, industries, petroleum, statistics and water resources.

It also listed WAPDA, EOBI, PMDC, the Narcotics-related federal structure, the Press Information Department (PID) and several other authorities and organisations for restructuring or devolution.

The committee further argued that matters falling under Federal Legislative List Part II should be dealt with through the CCI rather than the federal cabinet.

These include railways, oil and gas, petroleum, electricity, WAPDA, major ports, regulatory authorities, national planning, public debt, census, professional standards, higher education and inter-provincial co-ordination.

It said the constitutional role of the CCI was particularly important for protecting the interests of smaller provinces from federal decision-making dominated by the numerical strength of one province in the National Assembly.

The committee rejected what it called an “erroneous” interpretation of the Supreme Court’s 1997 Gadoon Amazai judgment, arguing that subsequent constitutional changes requiring the CCI to meet at least once every three months had addressed concerns about its ability to oversee matters on a continuing basis.

The sub-committee recommended that the federal government amend its rules of business and that the CCI frame its own rules under Article 154.

It also called for frequent CCI meetings and urged the prime minister to take matters including electricity, petroleum, gas, railways and regulatory authorities to the council instead of the federal cabinet.

The committee proposed restricting the federal government largely to nine areas, including defence, foreign affairs, finance, commerce, communications, maritime affairs, science and technology, law and justice, and parliamentary affairs.

It estimated that federal expenditure could consequently fall from around Rs19 trillion to Rs13 trillion, freeing approximately Rs6 trillion for provincial governments.

The committee said the proposed savings were particularly significant when compared with the 2026-27 provincial budgets of Balochistan (Rs1.089 trillion), Khyber Pakhtunkhwa (Rs2.1 trillion), Sindh (Rs3.5 trillion) and Punjab (Rs5.9 trillion).

The committee warned that failure to implement its recommendations could have serious constitutional and security consequences, while genuine devolution would strengthen the federation and reduce reliance on foreign borrowing.

Copyright Business Recorder, 2026