ISLAMABAD: The Centre on Thursday assured the provinces of increased allocations for federally funded provincial projects based on their importance and viability.

Sources in the Planning Commission told Dawn that the assurance was given to the provincial leaders by Minister for Planning and Development Ahsan Iqbal on the instructions of the prime minister to accommodate provincial requirements.

The sources said all the provinces had called on the development minister after they raised strong protest over reduction in allocations for health and education related projects from around Rs27 billion during current year to around Rs5bn for next year on the premises that these projects stood devolved to the provinces.

“It will be a win-win arrangement for both the Centre and the provinces where federal priority projects would not be drastically affected but provincial projects would get some accommodation,” said a Planning Commission official.

He said the provinces were demanding increase in federal allocations in terms of percentages or in line with population share. This was not entertained by the Centre which agreed to increase provincial allocations on a project-to-project basis having larger outreach to the people.

After a meeting with Mr Iqbal, Sindh Finance Minister Syed Murad Ali Shah told journalists the province made alternate recommendations regarding vertical federal projects and other provincial projects so far being funded by the federal government. He said Sindh’s Rs22bn worth of projects had been affected by the PSDP allocations.

He said provincial government proposed that since the overall PSDP size had been increased by 10 per cent, a proportionate increase should also be made for projects in Sindh. Also, given the importance of the Rs25bn K-4 Water supply project for Karachi, the federal government was asked to disburse 50pc federal funding to speed up the project. He said the Centre had released Rs200 million for K-4 while Sindh had so far disbursed Rs90m.

He said the federal government had not allocated funds for vertical projects of health and education sectors for Sindh and it was requested to provide funds for 36 projects that have been going on since 2006-07 for their earliest completion.

Responding to a question, he said the perception of bad governance in Sindh was unfounded as it had collected more revenues than other provinces or the Centre. He said Sindh also asked the federal government to provide sovereign guarantee for the province’s bid to secure Rs50bn loans from international agencies to upgrade all district headquarters in Sindh.

He said the federal government had cut Sindh revenue share by Rs27bn from Rs381bn on the premise of lower collections by the Federal Board of Revenue. He said Sindh had so far been provided Rs250bn share out of divisible pool and the Centre had promised to clear Rs103bn before the close of this fiscal year.

Published in Dawn, May 29th, 2015

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