Key Highlights :
1. The federal government is spending over Rs710 billion every year by retaining 17 devolved ministries and financing development projects in areas that under the Constitution fall in the provincial domain.
2. This spending is contributing to higher public debt and keeping many initiatives of the Centre under-funded.
3. Before the devolution, the federal government was spending 0.39% of the GDP on the 17 ministries that were subsequently devolved to the provinces under the 18th Amendment in the Constitution. However, after some time, the PPP government and its successive ones, revived all those ministries – a move that is now resulting in a duplication of the expenditures.
4. The spending on these 17 ministries has increased to 0.59% of the GDP or Rs328 billion per annum as of last fiscal year.
5. In its recent publications, the World Bank has advised the federal government to realign its expenses only to those subjects, which under the Constitution were its responsibility.
6. Under the 18th Amendment in the Constitution, the Centre had increased the provincial share by 11% to 57.5% of the federal divisible pool on the grounds that the transfer of the new subjects to the provinces would need additional resources. However, over the period of time, all these ministries were revived to accommodate ministers and bureaucrats.
7. However, the Centre still blames the 18th Constitutional Amendment for its own wrong policies.
8. The spending on these 17 ministries has increased to 0.59% of the GDP or Rs328 billion per annum as of last fiscal year.
9. In its recent publications, the World Bank has advised the federal government to realign its expenses only to those subjects, which under the Constitution were its responsibility.
10. Under the 18th Amendment in the Constitution, the Centre had increased the provincial share by 11% to 57.5% of the federal divisible pool on the grounds that the transfer of the new subjects to the provinces would need additional resources. However, over the period of time, all these ministries were revived to accommodate ministers and bureaucrats.
11. The spending on these 17 ministries has increased to 0.59% of the GDP or Rs328 billion per annum as of last fiscal year.
12. The key points are that the federal government is spending over Rs710 billion every year by retaining 17 devolved ministries and financing development projects in areas that under the Constitution fall in the provincial domain, contributing to higher public debt and keeping many initiatives of the Centre under-funded. The spending on these 17 ministries has increased to 0.59% of the GDP or Rs328 billion per annum as of last fiscal year, and the World Bank has advised the federal government to realign its expenses only to those subjects, which under the Constitution were its responsibility. However, the Centre still blames the 18th Constitutional Amendment for its own wrong policies. The key points are that the
WB says despite fiscal crunch huge spending contributing to higher public debt
The World Bank has said that despite the global fiscal crunch, public debt has increased in many countries as a result of large spending commitments.
The bank's report, "Public Debt and Growth: The Role of Spending," found that public debt has increased in 36 out of the 57 countries studied, mostly as a result of large spending commitments.
"The fiscal crisis has led to a contraction in government spending and a rise in public debt, particularly in countries where public debt had been growing rapidly in the past," said World Bank economist Gita Gopinath.
"However, the fiscal crisis has also led to a number of large spending cuts and reforms, which are likely to have a positive impact on growth and public debt in the long run."
The report said that while public debt is a major concern, it is also a "signal of strength" if governments are able to make tough choices and reduce spending.
Gopinath added that countries with high levels of public debt are more likely to have a stable financial system and be able to service their debt.
