'Unity in diversity' is the fundamental theme of the 18th Amendment, which means that the federating units should be given those responsibilities which they are able to perform, said renowned economist and former finance minister Dr Hafiz A Pasha.

He was talking to Business Recorder.

Referring to the chapter on the 18th Amendment in his recent book on growth and inequality in Pakistan, Dr Pasha said what we need is not less but more devolution.

One of the major reforms in the 18th Amendment was the insertion of Articles 32 and 140A in the Constitution for promotion and establishment of local governments. Unfortunately, he said, this has not happened. This is a tragedy because if we had had local governments down to the union council level, the COVID-19 relief packages would have been much better targeted and delivered, he added.

Also, there is an overlap in the performance of functions by the federal and provincial governments. There is a need for the federal government to devolve fully the functions which are outside the federal legislative lists. This will save expenditure and a number of divisions could be halved if this happens, he said.

Dr Pasha said the seventh NFC Award has led to an increase in transfers to provincial governments. Fortunately, the provincial governments have been spending much more on health than was the case prior to the Award. The expenditure by the provinces has increased to one percent of the GDP on health after the Award as compared to 0.5 percent of GDP earlier. The rate of expansion in hospital beds tripled after the Award. This has, no doubt, given us somewhat a stronger health sector to tackle the pandemic. He said it is likely that this year transfers to the provinces will have a record shortfall of Rs300 billion in the last quarter of the current fiscal. This will be partly due to the negative impact of COVID-19 and the provinces will be in a difficult financial position in coming weeks. They may have to seek approval of the National Economic Council for borrowing as per Article 167(4) of the Constitution. This must be done quickly otherwise the provincial governments may not even be in a position to pay salaries. According to him, the notification for the 10th NFC Award has been issued by the President. The 7th Award was extended for six years and especially after the population census, there is a need for a new sharing arrangement. The Article 160(3a) of the Constitution says that the share to be given to the provinces and a new award must not be less than the share in the previous award.