27 – Rover’s Diary

Once again there is talk to bring the simmering issue of provincial autonomy on the front burner. At least there seems to be a broad consensus among all the major political parties that this elusive issue should be tackled now.

 

Upsurge in Balochistan has pushed the government to take the autonomy issue seriously and urgently. There is growing realisation that the smaller provinces cannot be brow beaten by using military power and doling out money as money as grants instead of due share of these province.

 

Lot of emphasis is being given to the transfer of concurrent list subjects in the constitution to the provinces. It is no doubt a genuine demand, as these subjects should have been transferred to the provinces in the eighties. But a close look at the subjects mentioned in this list show that the provinces would not be much enriched by this change.  Most of the 47 subjects mentioned in this list would bring no financial gain to the provinces. Electricity is the only subject, which can bring any financial benefit to the province. But here too WAPDA is placed in the Part II of the Federal Legislative list.

 

Some of the subjects are already duplicated between the center and the provinces. In some cases transfer of the subjects like Ancient historical sites, monuments, archaeological sites and remains would add to the financial responsibilities of the provinces.

 

Real provincial autonomy issues are related to the control of the provinces over their natural resources and fiscal authority on taxes, which have buoyancy and elasticity. Balochistan Governor has raised the pertinent demand that the province should be given 20 per cent equity of Pakistan Petroleum Limited (PPL). This may not satisfy the nationalists who demand full control over their natural resources, but it does show that even the present government high ups are feeling that Islamabad would have to give in to some extent. To get better results and to be fair the equity should be divided equally between the province and the district from which the natural resources are exploited. This would create the local population stake in the oil & gas exploration projects and mineral mining. At present a drop trickles down to the poor people living in natural resource rich areas. A visit to these sites, which are producing billions of rupees oil, gas and minerals, shows the pathetic living conditions of the people of these areas. If their stakes are built in the projects they will be the first one to protect these sites and provide hospitable environments to the investors. The government cannot pass on the burden of all the social sector projects on the investors in these areas and abdicate its own responsibilities.

 

Same is the case with the fiscal powers. Most of the provincial taxes have little space to grow. Its about time the provinces should be allowed to impose their own sales tax and the Federal government should cut its share in this tax to not more than three to five per cent. As sales tax is basically a consumption tax each province would get its share in proportion with its consumption. This would wash the irritant in the inter-provincial relations. At present smaller provinces feel distribution of government revenues on population basis is unjust. They rightly claim that the present NFC formula discourages the provinces to control their population and generate more taxes.

 

What would happen to the under-developed Balochistan if the major tax heads were transferred to the provinces? This question is valid but the transfer of taxes and profits on its fisheries, minerals, oil and gas resources would give Balochistan enough to provide for its 8 million population. It would also encourage the people of Balochistan to go out and seek investment into the province.

 

 

 

 

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