Centre’s spending on provincial subjects incurring over Rs700bn annual loss: WB
Duplication of ministries at federal levels despite 18th Amendment resulted in Rs320 billion losses annually
ISLAMABAD: The duplication of ministries at the federal government, continuation of the Higher Education Commission and execution of provincial nature projects through the Public Sector Development Programme (PSDP) are causing annual losses of Rs705 billion.
The World Bank economist, Derek Chen, said this while launching the Pakistan Development Update report at the World Bank Office here in Islamabad. He said that the duplication of ministries at federal levels despite the 18th Constitutional Amendment that devolved these subjects to the provinces had resulted in financial losses of Rs320 billion annually. Furthermore, the continuation of HEC caused a loss of Rs70 billion and the overlapping of provincial nature projects through the PSDP incurred Rs315 billion in losses on an annual basis.
Besides, there were 70 percent rigid expenditures, including employees' salaries, pensions, operating expenses, subsidies and interest payments in Pakistan, said the WB economist.
The Pakistan Development Update report of the WB says that despite the 18th Amendment, the federal government maintained recurrent spending on areas devolved to the provinces. The rationalization of overlaps between federal and provincial recurrent spending provides opportunities for fiscal savings. Spending on federal ministries focused on devolved subject areas can be gradually reduced and eventually eliminated, suggested the WB report.
The federal government continues to engage on devolved subjects through semi-autonomous bodies that focus on devolved service delivery areas, such as the HEC and NCHD. These institutions can be completely devolved to provinces, the WB report said.
