Centre to partly fund provincial health, education projects

ISLAMABAD: In a major development the Centre and the provinces, especially Sindh, on Thursday agreed to include vertical projects in the PSDP list for the next budget wherein the federal government will continue providing funds for education and health projects. The provinces will finance population-related projects by utilising their own resources.
Talking to The News late Thursday night, federal minister for planning Ehsan Iqbal said that the federal government would continue providing funds for some vertical projects in education and health sectors. When asked about the cost of these projects, he said that the federal government would have to bear the cost of Rs10 billion. However, the sources said that the Centre has decided to absorb some portion of vertical projects while provinces would also share some burden.
Earlier Prime Minister Nawaz Sharif had directed federal minister for planning Professor Ahsan Iqbal to address the concerns of the provinces, particularly those pertaining to inserting their projects into the next development plan. The PM advised the federal minister to fulfill the demands of the provinces keeping in view the existing resource envelope of Rs580 billion.
Sindh chief minister Syed Qaim Ali Shah and provincial finance minister Murad Shah have met Ahsan Iqbal and asked him to include vertical projects of social sector, especially health and education, into the next Public Sector Development Program (PSDP).
Chief minister KPK also met the federal minister and demanded the same, also emphasising that the need to increase development funding for the terror-hit province.Sindh has also protested over decreasing share in resource distribution formula under NFC award, saying it received Rs130 billion less than what the centre had promised for 2014-15.
The federal government argues that the FBR’s collection were less that its envisaged target so they were distributing resources in accordance with the agreed formula on federal divisible pool (FDP). Only Balochistan enjoys that luxury that its share is protected despite shortfall in FBR’s tax collection. Balochistan will get its share in accordance with the FBR’s initial target of Rs2810 billion for 2014-15.
All other provinces get share on the basis of actual collection by FBR and the share of all three provinces - Punjab, Sindh and KPK - was reduced proportionately in accordance with the formula.
The provincial governments are also coming under criticism for not utilizing their resources and creating surplus to earn incentives while asking the Centre to complete projects that fall in their jurisdiction.