Why the federation is at odds with provinces?
By Zamir Ghumro
AGAINST the backdrop of a raging controversy and widespread protests in the country in general and in Sindh in particular over the construction of mega dams, the federal cabinet decided on January 1 to revive the Council of Common Interests under Article 153 of the Constitution and to refer to it all the controversial schemes of dams/water reservoirs as provided under Article 155.
This wise decision was lauded by all and sundry and fresh hopes were revived that now all the controversial issues bedevilling the relations between the federation and the provinces will be settled through proper constitutional forums instead of forcing solutions through executive fiats. But unfortunately within days in another meeting, the cabinet decided to approve of the construction of five big dams with an unusual hurry. The very next day President Pervez Musharraf announced the construction of Bhasha and Munda dams in a televised address to the nation ostensibly to take the wind out of the sails of anti-Kalabagh dam protests.
In his address to the nation, President Musharraf not only announced the construction of Bhasha and Munda dams but also chose to refer the distribution of national resources between the federation and the provinces. He announced an increase in the vertical distribution of the net proceeds of the taxes mentioned in clause 3 of Article 160 between the federation and the provinces from the ratio of 62.5:37.5 to 55:45, which will progressively increase to 50:50 per cent during next five years. However, for horizontal distribution among the provinces, the same old formula based on the single factor of population has been retained and a multi-factor formula demanded by three smaller provinces has been rejected on grounds of supposed gap in the viewpoints of the provinces.
That the controversy between the federation and the provinces on vital issues may be settled through an address to the nation by the president of the republic speaks volumes about the state of disagreement, lack of trust and inadequacy of constitutional mechanisms to solve these issues in a smooth manner. As a result of this, the smaller provinces have been claiming that the federal government, instead of solving problems between the federation and the provinces under the constitutional provisions, has always been thrusting its own will on them.
This has created a lot of bad blood among them. In the absence of a genuine representative government and the presence of a president in uniform, the smaller provinces think that the centre is heavily tilted towards one big province which has an overwhelming and undue share in the civil-military establishment, and it is because of this reason that the federation always imposes NFC awards or controversial water sharing schemes under the present dispensation.
In the past too the decisions about NFC awards (except in 1974), controversial water schemes and military cantonments in smaller provinces have been taken either during caretaker set-ups or military-dominated regimes, thus negating the very spirit of the constitutional provisions and norms. It is beyond doubt that the issues of water, distribution of national resources, royalty on oil, gas, hydro-electric power and other natural resources and the share of smaller provinces in federal services and its associated bodies and institutions are at the heart of the dispute between the federation and the smaller provinces.
Are these issues so intractable that they defy amicable solution and the federation and provinces in this country have always to stay on a collision course? The answer is a definite ‘no’ because even the amended and defaced Constitution of 1973 offers hope and provides a detailed mechanism to deal with all such issues.
The successive governments have, however, avoided taking up these issues sincerely in a constructive spirit for the simple reason that it will open the Pandora’s box and they will have to lose grounds in one or another province. The recent unrest in Balochistan and the subsequent crackdown by the federal forces points towards a deepening of a crisis which has the potential of harming the very fabric of the state. It is time to take the bull by the horn and seriously address the reservations and deep-rooted grievances of the smaller provinces in the spirit of accommodation.
When the Constitution does provide the mechanism for resolving conflicts or with one single amendment the dissenting views of the provinces can be accommodated, then what is the need for the federal government to resort to strong-arm tactics in Balochistan and force the people to take up arms and climb mountains? The simple answer is that the conflict-resolution within the constitutional parameters has been anathema to the military-led governments in Pakistan. They believe in brute State power and executive methods to cow down people fighting for their legitimate rights.
In fact, there are two kinds of issues between the federation and the provinces. One set relates to the subjects of Council of Common Interests and another relates to the distribution of national resources through the National Finance Commission. These can be solved in a very effective manner by adopting following constitutional procedure.
(a) As far as the controversial water schemes, income from oil and gas and the share of the provinces in federal services and institutions is concerned, a permanent body of Council of Common Interests provides a complete answer. The subjects enumerated in the part II of the Federal Legislative List are supposed to be in its exclusive control and supervision which include: railways, oil, gas, Wapda, heavy industries and organizations, electricity and water.
However, for the reasons best known to the federal authorities, this constitutional body has never been constituted in true spirit. Had it worked permanently, many grievances of the provinces on account of controversial water schemes, oil and gas income, ports, share of jobs in federal organizations would have been removed to a great extent.
What the federal government wants to do is to apply constitutional provisions selectively. Where the interests of the provinces are involved, it has no concern at all. This can be gauged from the fact that the controversial Thal canal scheme was approved by the National Economic Council instead of the Council of Common Interests which is the appropriate constitutional forum to take up such controversial schemes under Article 155 of the Constitution.
Similarly, if the railways, oil, gas, ports, heavy industries and organizations are equally controlled by the Federation and provinces through Council of Common Interests, there will be little uproar in Balochistan over Gwadar, oil and gas income and control over natural resources. The provinces will have an equal say in matters of recruitment and appointment of staff in the above organizations and departments.
(b) Another major irritant is the distribution of national resources through NFC under Article 160 of the Constitution. The framers of the Constitution at that particular time had probably not foreseen the controversy over the composition of NFC itself.
The Commission, which has heavy presence of the provinces, has completely failed to reconcile the positions of all the four provinces on this vital national issue. It has to submit its recommendations after developing a consensus between federation and the provinces on the one hand and among the provinces on the other. It is very hard to reach a consensus where vital stakes of the provinces are involved. It is because of this reason that it has been able to submit consensual recommendations only on three occasions — 1974, 1991 and 1997. However, on the last occasion, its recommendations came under severe criticism from smaller provinces as these were submitted during a care-taker government.
The last NFC failed to give its recommendations within the stipulated period of five years and the president’s announcement points to deep schisms on this issue. With barely less than two years to go for the national polls, it would have been prudent to leave the decision to the next government elected through popular vote. The very announcement of the distribution of the resources by the present government creates doubts among the smaller federating units as the present dispensation is heavily tilted in favour of the big province and it is being alleged that the viewpoint of only one province has been accommodated.
It is an admitted fact that in the present scheme of things, there is little fiscal space available to the provinces. They depend heavily on the centre for grants as well as regular transfers. In order to widen the tax base of the provinces, one major tax must be allocated to them and that surely is tax on sale and purchase of goods imported, exported, produced, manufactured and sold. The sales tax on services is already the domain of the provinces and before 1973 sales tax on purchase and sale of goods was purely a provincial tax with some percentage given over to the centre for some compelling reasons.
Moreover, the composition of the present NFC will have to be changed. A totally neutral and Independent body consisting of experts in various fields of national life must be created. This may submit its recommendations to the president after thorough and independent technical exercises. For this purpose, there needs to be one single amendment in Article 160 of the Constitution in order to change the composition of the NFC as well as to surrender the sales tax to the provinces. Given the willingness of the provinces, this should not be difficult, as it will create harmonious relations between the centre and the provinces.


