THE provincial governments are under pressure to free up resources from their share of transfers under the NFC award to help meet defence and debt servicing requirements of the federal government. Conversations with those in the provincial governments who are familiar with these developments suggest they are preparing to accommodate this pressure, but in a way that does not require amending the constitutional clause which guarantees that the provincial share in the NFC award will not be reduced.

It is hard to make a case for sharing the costs of debt servicing with the provinces. Unless the centre is willing to agree that it will only take on additional debt with the approval of the provincial governments, it cannot ask them to share in the cost of servicing this debt. But defence expenditure is different. The provinces can be told that since they are beneficiaries of the protection provided by the armed forces, some portion of the cost of maintaining this protection must be borne by them. The room to debate this matter is now limited since the centre has indicated that it must get assent on this question, otherwise it will modify the Constitution to extract the resources it needs regardless.

The total amount being asked of the provinces is supposedly around Rs500 billion per annum. The provinces have to agree on two things. First, they have to agree on who will bear how much of the burden to free up this amount between........

© Dawn