SIFC’s eye on Centre’s Rs1tr being spent in provinces

Ansar Abbasi
Wednesday, Mar 13, 2024

ISLAMABAD: The provincial governments are presently reluctant to fund the Benazir Income Support Programme (BISP) but the financial support programme, for being a provincial subject, has to be transferred to the provinces.

Informed sources said that this is part of the agenda set by the Special Initiative Facilitation Council (SIFC), which, in consultation with the provinces, is in the process of settling money matters between the Centre and the provinces as per their constitutional division of responsibilities. The federal government’s funding in subsidies and projects, falling in provinces’ domain, estimates around Rs1 trillion.

The purpose of these deliberations is to address the financial constraints of the federal government and ensure better utilisation of funding available to the provinces, particularly after the 18th Amendment.

As part of this policy, and following the decision of the federal and provincial authorities at the SIFC level, the federal government has already stopped including or funding new provincial projects in its Public Sector Development Programme. The PSDP presently allocated around Rs300 billion projects, which purely fall in provincial domain.

New provincial projects will not be funded whereas those already in the implementation stage will be completed. In exceptional cases like for least developed districts and regions, the federal government may fund some projects.

According to the sources, since higher education is also a provincial subject, its funding by the federal government is being stopped. Similarly, the federal government from next fiscal year will no longer fund subsidies on fertilizer and electricity for tube-wells as these functions also fall in the provinces’ domain.

The sources said that the issue of BISP, for being an income support programme falling in the jurisdiction of the provinces, has been discussed at the SIFC level but because of provinces’ reluctance, the federal government continues to fund the BISP. Initially the proposal is to fund the programme on a 50:50 percent basis and then at a later stage shift the programme’s entire funding to the provinces. The federal government has allocated Rs450 billion in the current fiscal year for the programme.

A SIFC source told this correspondent that Rs100 billion, already secured from provincial schemes, has been diverted to national mega hydel projects of Dasu, Mohmand and Tarbela Dams.