ISLAMABAD, Sept 20: The National Reconstruction Bureau (NRB) has prepared a package of proposals for transferring certain powers of taxation and services to the provinces, the prime minister said in a speech.

The federal government “will very soon take up the issue of fiscal and administrative decentralization” to create harmony and respect between the centre and the provinces, he said in a speech read out at a two-day national seminar on the Problems and Politics of Federalism in Pakistan, which opened here on Tuesday.

Minister of State for Law and Human Rights Shahid Akram Bhinder read out the speech to the audience of the seminar organized by the Islamabad Policy Research Institute with the help of the Hanns Seidel Foundation of Germany.

“A strong federation is unthinkable without strong federating units,” the premier said, adding, “provincial harmony cannot be promoted without removing regional economic imbalance”.

“For this purpose, on the one hand the federal government has agreed to transfer more resources to the provinces while on the other, it has initiated work on development projects on a large scale in the less developed regions,” he said. “Under this policy special funds have been allocated for Balochistan and Fata.”

The federal government “has accepted the suggestion to include elements like development needs, poverty and area in addition to population in the criterion for horizontal distribution of funds among the provinces from the Federal Divisible Pool”, the prime minister said.

Prime Minister Shaukat Aziz was confident that as the new system of devolution of power consolidated and more powers and responsibilities were transferred from the provinces to the district governments, the federation of Pakistan would be strengthened.

“It is wrong to say that the Devolution of Power undermines provincial autonomy,” said the prime minister.

But the speakers who followed him sounded more sceptical than hopeful about the country’s ruling elite.