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December 10, 2019

Filling federal coffers


December 10, 2019

All four provinces, and particularly the three ruled by the PTI and its allies, have returned a large sum of money as cash surplus to the centre during the first quarter of the current fiscal year to help the federation meet fiscal targets committed to the IMF. The provinces did not utilize more than 25 percent of the funds allotted to them for development and for the welfare of citizens. The revenue was given out to the provinces from the federal divisible pool. Much of it has now returned to the centre.

Out of the four provinces, three provinces ruled by the PTI or its allies were the most frugal in development spending. This means that Khyber Pakhtunkhwa, Punjab and Balochistan can perhaps be criticized for not offering people their basic needs or putting in place schemes to provide them a security net in these times of high inflation. Infrastructure schemes badly needed to offer development to people were also held back.

Unsurprisingly, Sindh provided the lowest cashback compared to other provinces to the centre, and spent more on development schemes. The problem is a somewhat complicated one. It is imperative that government elected by the people spend as much as possible on ensuring their welfare. If they are under pressure to meet the requirements of the IMF programme this naturally becomes harder. The federal government in the meanwhile is desperate to meet its written commitment to the IMF. The progress it has made in this has already been reported to the IMF, which has been told the government would be making additional contributions to higher education, health, social protection, regional public infrastructure and agricultural subsidies. It is a little difficult to understand how this will happen if the provincial governments are not spending their share of development funds. Provinces like Balochistan and also KP which has recently absorbed the seven former tribal territories badly need to put development on the top of their list of priorities. If they fail to do this there is a danger that the fortunes of people will slump further and with this anger and instability will grow. We are essentially caught in a very tight position. A way has to be found to meet what we have promised the IMF and other donors without taking away the very limited resources available to help people better their lives and the quality of living.

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