Center directs ministries, provinces to finalise formula of 50% cost-sharing for devolved functions

Federal units will be responsible for sharing 50% of the total cost of PSDP projects, including BISP, HEC and power subsidies

The interim government in the center has issued directives to ministries and provinces to collaborate on finalizing a proposal for sharing expenses related to devolved functions, including programs such as BISP, the Higher Education Commission (HEC), and power subsidies.

As per a report by BR, this decision was reached during a recent meeting of the Apex Council of the Special Investment Facilitation Council (SIFC), which included representatives from civil and military leadership.

It is now mandatory for the provinces to share 50 percent of the total cost of projects in the Public Sector Development Program (PSDP) as per directives of the SIFC.

The federal government provides over Rs 1 trillion in annual subsidies to the power sector and provinces are encouraged to contribute their share to this subsidy program.

The Finance Division will work on the National Finance Commission (NFC) award in line with the recent census results, ensuring transparent provincial funding with specific conditions.

Sponsoring ministries and provinces are urged to adhere to policy guidelines, and the Ministry of Planning emphasizes the need for cost-sharing by provincial governments to sustain provincial projects.

Under the new policy, Federal/PSDP financing will cover capital investments, projects in underprivileged areas, and the original project costs, with any subsequent changes becoming the responsibility of provincial governments.

Projects following the federal government’s financing policy will require approval from the relevant decision-making bodies.

However, some provinces are hesitant to share 50 percent of the subsidy on urea, creating a point of contention with the federal government.

Monitoring Desk
Monitoring Desk
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