Part VI of the Constitution deals with finance, property, contracts and suits. Article 160 deals with the National Finance Commission and the shares Provinces and the Federation in taxes collected, which are mentioned in the said clause. These taxes are tax on income (or Income Tax), Sales Tax, export duties on cotton and such other export duties as specified by the President, such duties of excise as may be specified by the President and such other taxes as may be specified by the President.
Two new sub clauses (3A) and (3B) were added to Article 160. These two clauses are actually the bone of contention. The net effect is that the share of the provinces, no matter what the needs of the Federation might be, cannot be reduced. Secondly, a monitoring system has been put in place under clause 3 B and the Federal Minister of Finance and Provincial Finance Minister are the monitors and they have been obliged to lay their reports to both House of Parliament and provincial assemblies. Traditionally, the Senate had nothing to do with finances.
Article 161, clause 1 has been substituted with the effect that net proceeds of Federal Excise Duty (FED) on oil levied on well have also to be collected and given to the provinces in addition to the FED on natural gas has now been given.
Article 167 deals with borrowing power of the Provincial Government. A new clause (4) has now been added which has great consequences. It has no parallel in any federal constitution. Under this clause, a Province can now raise an international loan on the guarantee of its consolidated fund. Apparently, there is a conflict between clauses 1 and 4 of the said provision. Under clause 1, the executive authority to raise loan on the guarantee of the Provincial Consolidated Fund (PCC) is subject to a limit fixed by the Provincial Assembly. But there is no such requirement for an international loan. Moreover, perhaps it was not noticed by the makers of the Amendment that an international loan creates a charge upon the PCC and that cannot be done unless an Act of Provincial Assembly authorizes it as provided in Article 119 of the Constitution dealing the PCC.
But a more important constitutional anomaly is found in the said provision. Provincial Government has no constitutional authority to enter into international agreement as that would amount to dividing the sovereignty of Pakistan. Under Entry 32 of the FLL, the subject of international agreements is exclusively given to the Federation. Again. there is no parallel provision in any Federal Constitution and can there be any for that would amount to creating two sovereign powers within one state. When provincial government internationally represents itself and creates an obligation it cannot be fitted into a federal constitution.
Amendments in clause 2 of Article 172 were made which had the most far-reaching effect in so far as the Federation was concerned. Provinces of Sindh and Balochistan now exclusively own territorial waters and the minerals, land and anything of value to the exclusion of other provinces. Anything beyond territorial waters and continental shelf are now jointly vested in the Federation and the Provinces. All gas and mineral oil within the territorial waters adjacent to that province (Sindh and Balochistan) is now jointly vested in the Federation and in that province. Thus, the Punjab and the KPK have no rights in the territorial waters. I wonder if members from the Punjab and KPK knew the consequence of this amendment.
Some observations deserve to be made:
1. If the purpose of the 18th Amendment was to restore the Constitution to its status of 1999, then all the afore-said amendments creating a new Federation were definitely beyond that objective.
2. And if the purpose of the Amendment was to restore the original Constitution of 1973 then many amendments made by Zia and Musharraf were continued but all the afore-said amendments were made over and above that. It is claimed that it was agreed that after 10 years the concurrent list shall be abolished. An examination of debates, accords and the speech of late ZA Bhutto and correspondence do not contain any commitment.
3. If the purpose of the amendment was to grant provincial autonomy to the provinces then definitely the finances of the provinces stood increased as sales tax on services was given to the provinces, FED on oil was also given to the provinces. Estate duty was also given to the provinces. The share of the provinces in the NFC Award thus stood secured. The Federal Government is forced to borrow to pay off loans.
4. Under the international law, territorial waters belong to the State. State includes all provinces and not merely Sindh & Balochistan. Under the UN Convention on the Law of Sea (Article II), the territorial sea, its bed and subsoil belongs to the State. There is only one state ie. Pakistan as defined under Article 1 of the Constitution.
5. These two provisions are against the federalism as agreed upon by the framers of the Constitution, which is now the basic feature of the Constitution.
6. Federalism is now the basic feature of the Constitution. Parliament cannot change this basic feature.
The greatest merit of a constitutional democracy is that the people have the courage of accepting their mistakes and the conviction of correcting them.
(Concluded)
(The views expressed in this two-part article are not necessarily those of the newspaper)
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