The PPP has correctly advised the federal government to focus on increasing tax collection rather than attempting to increase the share of tax revenue that the provinces receive
In response to recent reports that the IMF wants Pakistan to reopen talks on the 2009 NFC award in order to address the “imbalance” in the way tax resources are distributed between the provinces and the center, PPP Senator Sherry Rehman dismissed claims that the international lender was meddling with the framework of resource allocation found in the constitution.
She questioned, “Why would the IMF want to intervene in Pakistan’s NFC formula changes?” Her assessment of the circumstances is correct.
The lender would prefer not to be seen getting tangled up in constitutional disputes, even if it does want the provinces to cut back on spending to create a fiscal surplus and share more financial duties with the federation to reduce the country’s growing consolidated fiscal deficit.
She also accurately attributed the nation’s financial difficulties and the $271 billion debt mountain to the continuously lower than 9 percent federal tax collection as a percentage of GDP.
Actually, some forces that support a powerful center and weaker federating units have been actively opposing and calling for the immediate repeal of the historic 18th Amendment to the Constitution and the current NFC award, which have granted theOver the past few years, the campaign seemed to gain traction as the nation’s financial situation deteriorated. However, strong opposition from the smaller provinces and some political parties, especially the PPP, along with constitutional safeguards for the current resource-sharing arrangement have prevented such forces from reversing the modifications.
The claim that greater provincial autonomy and a larger provincial share of the federal tax pool endangers federalism is unfounded because the topic deals with issues that will affect the nation’s future.
The state’s federal complexion would be harmed by any attempt to reduce provincial autonomy and financial authority since it would increase tensions between the federal government and the provinces as well as among the federating units.Pakistan’s founding fathers promised its constituent units autonomy and sovereignty in the Lahore Resolution, and they envisioned Pakistan as a federation.
But until the 2008 parliament fixed the issue, the country was unable to become a true federation due to the predominance of bureaucracy and the preference of military rulers for a highly centralised state structure.
Although there are still a lot of unsolved constitutional, administrative, and financial issues between the federal government and the provinces, one of those issues shouldn’t be the reduction of the political and financial authority that the latter currently enjoys. Instead of a centralized state structure, Pakistan’s future lies in increased federalism and democracy.
