Centre spends over Rs637bn on provincial subjects despite devolution under 18th Amendment

The Finance Division has released data showing that the federal government allocated Rs637.749 billion for health, education, and social protection during the fiscal year 2023-24. This funding covers essential services and social safety nets, reflecting the government’s ongoing efforts to improve access to key resources and services despite the decentralised responsibilities post-18th Amendment.

The Finance Division, for the first time, has publicly released a detailed account of the federal government’s current expenditures on health, education, and social protection—sectors that were constitutionally devolved to the provinces under the 18th Amendment in April 2010. 

These expenditures, amounting to Rs638 billion across the four provinces, Islamabad Capital Territory, and special areas, do not include development spending, highlighting the continued flow of federal funds into areas now under provincial jurisdiction despite no legal obligation to do so.

The finance ministry noted that with the 18th Amendment, multiple subjects were shifted from the federal legislative list to the provincial domain, granting the provinces greater autonomy in both financial and legislative matters.

A large portion of the total expenditure—Rs478.749 billion—was directed towards social protection programs. Of this, Rs466 billion was allocated to the Benazir Income Support Programme (BISP), with Rs350 billion distributed across the four provinces. 

In Punjab, Rs169 billion was allocated, while Sindh received Rs96 billion, Khyber Pakhtunkhwa (KP) Rs67 billion, and Balochistan Rs18 billion. Additionally, Rs7.4 billion was distributed through Pakistan Bait-ul-Mal (PBM), which assists in poverty alleviation efforts.

In health, the federal government allocated Rs45 billion for various ongoing health programs, including Rs12 billion for employee-related expenditures, Rs12 billion for operational costs, and Rs21.3 billion for the Expanded Programme on Immunization (EPI). The EPI, which has been running since 1978 to protect children against vaccine-preventable diseases, received substantial funding. 

Rs11.2 billion was allocated to Punjab, Rs5.1 billion to Sindh, Rs1.2 billion to KP, and Rs3.5 billion to Balochistan for this program. Additionally, Rs5.2 billion was spent on the Pakistan Institute of Medical Sciences (PIMS) in Islamabad, and Rs4 billion was allocated to the Federal Government Polyclinic (FGPC).

Further health expenditures included Rs4.9 billion for Shaikh Zayed Hospital in Lahore, which was a gift from the UAE in 1973, and Rs3.7 billion for the administrative costs of the Ministry of National Health Services, Regulations and Coordination. The National Institutes of Health (NIH) and the National Institute of Rehabilitation Medicine (NIRM) also received funding for their critical public health, research, and rehabilitation work.

In education, the federal government spent Rs114 billion, with a significant portion directed towards higher education. The Higher Education Commission (HEC) received Rs68.5 billion in grants, with an additional Rs1.3 billion allocated for operational and employee-related expenditures. 

A breakdown of provincial spending on education revealed Rs31 billion for Punjab, Rs15 billion for Sindh, Rs11.6 billion for KP, and Rs3.7 billion for Balochistan.

In addition to these allocations, Rs8.6 billion was spent under the World Bank’s Action to Strengthen Performance for Inclusive and Responsive Education (ASPIRE) program. 

The HEC disbursed approximately 16% of its funds to universities in Islamabad, Azad Jammu and Kashmir, and Gilgit-Baltistan, with the remaining funds directed to universities in the provinces.

These figures reflect the federal government’s commitment to addressing the social, health, and educational needs of the population, particularly in the provinces, while managing decentralization under the 18th Amendment.