FEDERATIONS devolve power constitutionally across state tiers. They ensure equity via fiscal transfers from rich to poor sub-units. Devolution makes power responsive. Equity cements national bonds despite diversity. Both together ensure peace and progress. Budgets help review both.

We give 57.5 per cent of federal taxes to the provinces. But once we count all revenues and provincial surpluses, the figure falls near 40pc, lower than in most large developing states. The transfers do raise equity as Balochistan’s per capita budget is now about Rs70,000 and Punjab’s about Rs45,000. But Balochistan is still the poorest unit after 16 years of devolution. We must study Australia’s unique system that ensures that each state has funds for similar services in line with local needs. Equity is also about which sub-units fund others. Rough data suggests only Sindh may be doing so (mainly due to Karachi). Punjab may be in deficit despite being the richest, biggest and strongest unit. So, the 82pc weight for population in NFC Awards must be cut in favour of poverty.

Our centre, provinces and local bodies spend about 70pc, 25pc and 5pc of all state outlays. The mean federal share among peer states is about 50pc. So, we are among........

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