The federal cabinet approved the devolution of seven ministries to provinces on Tuesday which, in sum total, implies that 17 federal ministries and the concurrent list stand dissolved. The five subjects that would be retained by the federal government are defence, finance, foreign affairs, communications and revenue.
Devolution was a long-standing demand of the provinces in their quest for greater provincial autonomy. However, the post-cabinet approval press conference by Raza Rabbani, the chairman of the eight-member 18th Amendment Implementation Commission, flanked by Federal Minister Dr Firdous Ashiq Awan and Syed Naveed Qamar, was not hailed by any provincial government.
The reason is not only attributable to the unexpected announcement by the MQM that it was exiting the PPP-led coalition both in the Centre and in Sindh with a significant ratcheting up of the anti-PPP rhetoric by the party leadership but also because the provinces expressed a fear that the functions of the devolved ministries would be transferred; however, assets and finances would not be transferred.
Additionally, it is widely acknowledged that the provinces simply do not have the capacity at present to take over the devolved ministries effectively. In this context, Punjab Chief Minister Shahbaz Sharif has requested the Prime Minister in writing to convene a meeting of the Council of Common Interest (CCI). No meeting has been scheduled yet and the Punjab Cabinet has approved a plan to take the matter to the Supreme Court.
The question however is whether the fears of the provinces in this regard are legitimate? The Public Sector Development Programme (PSDP) for the budget 2011-12 allocates absolutely nothing to these 17 devolved ministries. Thus health division, food and agriculture division, population welfare division, sports, labour and manpower, education and environment among others are not allocated any federal funds in the budget 2011-12. However, during 2010-11, the federal government spent about 17 billion rupees on these 17 subjects (around 17 percent of total allocation for PSDP for the year) as per the revised estimates revealed in the budget documents for 2011-12.
The 17 billion rupees spent is not a large amount indicating that these subjects were not priorities of the federal government and this amount is also well below the additional revenue that the provinces will receive as part of the 7th National Finance Commission (NFC) Award. In other words, the provinces would have more than ample additional funds to meet the shortfall in expenditure due to the zero federal allocation for these devolved ministries under PSDP.
However, the situation is quite different under current expenditure as the following statistics reveal: (i) education is allocated 40 billion rupees in 2011-12 (with the largest allocation on tertiary education as in the past) which is comparable to the revised 2010-11 estimates of 40.3 billion rupees; (ii) environment protection is allocated 577 million rupees in 2011-12 while the revised estimates for 2010-11 were 448 million rupees; (iii) recreational, culture and religion are targeted to receive 4.2 billion rupees in 2011-12 as opposed to 4.1 billion rupees received as per revised estimates of 2010-11; (iv) health allocation declined significantly from 7.4 billion rupees in the revised estimates of 2010-11 to 2.6 billion rupees in the budget 2011-12.
Thus, barring health the current expenditure allocation for the other 17 devolved ministries remained remarkably constant in the budget 2011-12. Be that as it may, as with the allocation under PSDP, the current expenditure allocations for the devolved ministries in past budgets were never that significant as the bulk was allocated to defence, debt servicing and salaries in that order.
There are, however, other critical issues that remain with respect to the devolution process. Analysts challenge the retention of some federal ministries that are currently headed by the PML (Q) as well as the transference of the functions and employees of other devolved ministries for various reasons to cabinet, planning or inter-provincial co-ordination division. The process is therefore not complete and much needs to be done. The forum for this remains the CCI.