Centre to stop financing provincial uplift projects

ISLAMABAD: With increasing resource crunch, the Centre has decided in principle to stop financing provincial development projects, particularly those relating to devolved subjects, to shift to the federating units the financial burden that now stands at above Rs320 billion.This is part of a new National Development Framework (NDF) under which the federal government wants to restrict its investment priorities to the areas of federal responsibilities and ensure that the provinces take full fiscal responsibility of all devolved subjects. The issue was discussed at a special meeting of the Central Development Working Party (CDWP) on Monday. It was presided over by Deputy Chairman of Planning Commission (DCPC) Mohammad Jehanzeb Khan. A senior Planning Commission official told Dawn that 16 federal ministries had been devolved along with development projects to the respective provinces following the 18th Constitution Amendment and abolition of Concurrent List. The financing of projects of provincial nature was discouraged through the Federal Public Sector Development Programme (PSDP) except for core vertical projects of health and population till 2017.

The financial burden on the federal budget, however, kept on increasing despite the fact that its fiscal share in divisible pool is shrinking from over 57 per cent to about 45pc under the 7th National Finance Commission (NFC) award almost at the same time. The provincial projects have since then crept back into the federal PSDP, leaving a limited fiscal space for projects of national importance .........