Pakistan plans to give provinces Financial Autonomy
'Pakistan Times' Punjab Bureau

LAHORE: The Inter-Provincial Coordination Committee (IPCC) on Saturday decided to get feedback from provincial and district governments on the free trade agreements (FTAs) being signed by the Centre with other countries.

The IPCC which met at the Civil Secretariat here on Saturday, with federal Minister for Inter-Provincial Coordination Salim Saifullah in the chair, reviewed progress on implementation of the decisions taken in the last meeting of the IPCC held in September this year.

Saifullah accompanied by Punjab Minister Chaudhry Zaheeruddin, and Sindh Minister Dr Sohrab Khan told reporters at a news briefing that the meeting decided that the governments would appoint focal points for better coordination/feedback on the free trade agreements (FTAs) being signed by the federal government with foreign countries.

The federal government wanted to involve provincial and district governments on the FTAs so that maximum advantages could be availed from these agreements with mutual coordination, he said.

He said the provincial governments had raised objections to the imposition of Capital Value Tax (CVT) on transactions of property, adding that it was decided to take steps to broaden the tax base of provinces.

Although, the Punjab and Sindh governments were seeking entrusting of collection of Sales Tax to them, the matter involves various complications because Balochistan and the NWFP have limited collection under the head of sales tax, he asserted.

Saifullah said the government intends to give financial autonomy to the provinces and it had planned to distribute Rs 635 billion each to the provinces by 2010.

Responding to a question about provincial autonomy, he said two committees under the chairmanship of Senator Mushahid Hussain Sayed and Senator Wasim Sajjad had been formed to give the provinces autonomy.

About 90 per cent recommendations of the committee headed by Senator Mushahid had since been implemented. The committee headed by Senator Wasim Sajjad is going to finalise its recommendations before the end of the current calendar year.

Saifullah said the government wanted to give maximum autonomy to the provinces, but it would require constitutional amendment for which cooperation of other parties is necessary.

About the transfer of inter-provincial grants to all the districts in the four provinces under the National Gender Reforms Action Plan (GRAP), he said it was decided in the meeting that under this plan, grants will be given to the provinces which will further distribute the same to district governments.

On the issue of imposition of Infrastructure Cess/Fee on import of gold by the Sindh government, Saifullah said that the IPCC meeting was informed that the matter was pending adjudication in a court of law. It was resolved to seek an out-of-court settlement on this matter.

Regarding sharing of law & order expenditures, the minister said the federal government would ensure equitable distribution of law and order funds.

Although, maintenance of law and order is a responsibility of the provincial governments, the federal government has decided to extend all-out support to provinces to fulfil this obligation.

It has also been decided in the meeting that federal Interior secretary will hold a meeting with the representatives of the provincial governments to further improve the law and order.

About release of the provincial share for the institutional arrangements of the Mines and Mineral Development departments of the provinces, Saifullah said the Ministry of Petroleum will release the required funds to the provinces soon, so as to enable them to take steps for exploring the natural resources.

On the issue of reconciliation of original loan amount of CDL SCARP loans, the minister said it was resolved in the IPCC meeting to ask Wapda to complete the exercise of reconciliation within 30 days.

Regarding dues of provincial autonomous corporations against the federal government, he said it was decided that the Finance Division would make at source deduction to clear such liabilities.

About the issue of promotion of officers of grade 21 and 22 from Fata/Balochistan in the federal government and posting of provincial civil servants and employees of autonomous bodies/corporations on deputation under the federal government, Saifullah said that the meeting expressed the resolve not to allow injustice with any civil servant.

When asked about the construction of Kalabagh dam, he said this issue falls in the domain of the Council of Common Interests (CCI).

Saifullah said, “We are trying our best to present a provincial autonomy bill in the National Assembly, but the government has not the required majority to amend the Constitution so the Pakistan People’s Party-Parliamentarian (PPPP), Muttahida Majlis-e-Amal (MMA) or both parties must support such a bill for approval in parliament.”

The political parties, including PPPP, PML-N,ANP, MQM, MMA, JWP and PKMAP, have submitted their proposals and the government was reviewing all of them seriously, he added.

Replying to a query, he said there were 47 items in the concurrent list while the federal government could agree to 25 items to deliver to the provinces.

He said the federal government had introduced the Capital Value Tax on immovable property this year but we agreed that the provinces would collect such tax in future.●