dr. pervez tahir, former chief economist, planning commission of

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  • Implications of the

    18th Constitutional Amendment for

    National Planning and Economic Coordination

    DR PERVEZ TAHIR

    FORMER CHIEF ECONOMIST, PLANNING COMMISSION OF PAKISTAN

    AND

    DR NADIA TAHIR

    ASSOCIATE PROFESSOR

    UCP BUSINESS SCHOOL, UNIVERSITY OF CENTRAL PUNJAB, LAHORE

  • The subject

    National planning and national economic

    coordination including planning and coordination of scientific and technological research.

    Pre Amendment: Serial No.32, Federal Legislative

    List, Part I, Fourth Schedule

    Post Amendment: Serial No.7, Part II

  • Council of Common

    Interests (CCI)

    Article 154 (1):

    The Council shall formulate and regulate policies in

    relation to matters in Part II of the Federal Legislative

    List and shall exercise supervision and control over

    related institutions.

  • Planning: Related institution

    in the Constitution

    156 (2):

    The National Economic Council shall review the

    overall economic condition of the country and shall, for advising the Federal Government and the

    Provincial Governments, formulate plans in respect

    of financial, commercial, social and economic

    policies; and in formulating such plans it shall,

    amongst other factors, ensure balanced

    development and regional equity and shall also be guided by the Principles of Policy set out in Chapter

    2 of Part-II.

  • National Economic Council

    (NEC): An advisory institution

    NEC charged with the responsibility of making

    plans for advising the Federal Government and

    the Provinces

    This advice needs an approval forum before

    operationalization

  • CCI and planning

    Planning on Federal List, Part II

    Part II the domain of CCI

    CCI cannot perform this function unless it

    exercise[s] supervision and control over related

    institutions, in this case NEC

    Transition from centralized planning to federalized

    planning

    Chaired by the Prime Minister, equal Federal-

    Provincial representation

    Decisions by the majority rule

  • Provincial empowerment

    after Amendment

    Balanced development and regional equity

    Full control of social and production sectors

    Larger role in electricity, water sector, ports, natural resources

    Larger public sector development programme than the Federal Government

    Post- 7th NFC, larger revenue to spend than the Federal Government

    NFC award irreversible and subject to regular Parliamentary oversight Article 160 (3A, B)

    Provinces allowed to contract domestic and external debt

  • Constitutional deviation

    CCI not involved in planning

    NEC reconstituted, but functioning as before

    Governed by the Federal Government Rules of

    Business 1973

    Not a body of the Federation but a committee of

    the Federal cabinet

    Cabinet Division the Secretariat

  • Non-constitutional bodies

    - I

    Executive Committee of the NEC ECNEC -

    approves projects/programmes as it used to

    Set up under Federal Rules of Business

    Functions as a Federal Cabinet Committee,

    chaired by Finance Minister and Cabinet Division

    is the Secretariat

    Planning Commission provides technical input

  • Non-constitutional bodies

    - II

    Before approaching ECNEC, all Federal schemes

    costing over Rs one billion and Provincial schemes

    costing over Rs 10 billion appraised and cleared by the Central Development Working Party

    (CDWP) chaired by Deputy Chairman, Planning

    Commission

    Approval forum for schemes costing upto one

    billion rupees

  • Non-constitutional bodies

    - III

    In case of Federal funding or external financing,

    even Provincial schemes must go through the

    CDWP/ECNEC process

    Concept Clearance Committee (CCC) under

    Deputy Chairman, Planning Commission, grants

    permission to negotiate with the donors

    Article 160 (4) allowing provinces to contract debt

    violated

  • A hint of federalized

    planning and economic

    coordination

    Article 167 (4):

    A Province may raise domestic or international

    loan, or give guarantees on the security of the

    Provincial Consolidated Fund within such limits and

    subject to such conditions as may be specified by

    the National Economic Council.

  • A hint of federalized

    planning and economic

    coordination

    In a case submitted by Ministry of Finance, the

    CCI directed Finance Division and the Provincial

    Governments to work out a proposal on the borrowing limits of the Provinces and, as required

    by the 18th Amendment, seek the approval of the

    NEC before it is considered by the Council of

    Common Interests.

  • Federalized planning and

    economic coordination

    Decisions of the NEC thus require the approval of

    the CCI, as planning and economic coordination

    is a matter related to Part II of the Federal List.

    The main economic coordination body is the

    Economic Coordination Committee, a Cabinet

    Committee provided secretariat facilities by the

    Cabinet Division and functioning under the Rules

    of Business of the Federal Government.

    Economic coordination business placed in Part II

    of the Federal List fragmented

  • Way forward

    Instead of the Rules of Business of the Federal

    Government, the rules of CCI apply to the NEC

    ECNEC composition should correspond to NEC composition, chaired by rotation.

    CDWP to be abolished

    Planning Commission is the institution related to

    the subject of planning and economic

    coordination. It has to be under the supervision

    and control of the CCI through the NEC.

  • Way forward

    The letter and the spirit of the Constitution can be

    satisfied by

    (1) making Planning Commission, in place of the

    Cabinet Division and Inter Provincial Coordination

    Division, the think-tank and Secretariat of the NEC

    as well as CCI

    (2) reducing the number of its members to five, one

    each from the Provinces and the Federal

    Government. Prime Minister chairs the NEC/CCI and

    there is no need for him/her to chair the Planning

    Commission

    The Chairman should be appointed by the CCI to represent the Federation, and by rotation

  • Way forward

    Pakistan Institute of Development Economics is

    under the administrative control of the Planning

    and Development Division. With Planning Commission moving to the CCI/NEC, the Planning

    and Development Division continues to deal with

    the development subjects in the Federal

    Legislative List, Part I. PIDE, under its administrative

    control, can be its think-tank

  • Thank You

  • NEC composition

    156 (1) The President shall constitute a National

    Economic Council which shall consist of:

    (a) the Prime Minister, who shall be the Chairman of the Council;

    (b) the Chief Ministers and one member from

    each Province to be nominated by

    the Chief Minister; and

    (c) four other members as the Prime Minister may

    nominate from time to time.

  • NEC meetings

    (3) The meetings of the Council shall be

    summoned by the Chairman or on a requisition

    made by one-half of the members of the Council.

    (4) The Council shall meet at least twice in a year

    and the quorum for a meeting of the Council shall

    be one-half of its total membership.

    (5) The Council shall be responsible to the Majlis-e-

    Shoora (Parliament) and shall submit an Annual

    Report to each House of Majlis-e-Shoora

    (Parliament).

  • Electricity

    Electricity.- (1) The Federal Government may in

    any Province construct or cause to be

    constructed hydro-electric or thermal power installations or grid stations for the generation of

    electricity and lay or cause to be laid inter-

    provincial transmission lines:

    Provided that the Federal Government, prior to

    taking a decision to construct or cause to be

    constructed, hydro-electric power stations in any

    Province, shall consult the Provincial Government

    concerned.; and

  • Composition of CCI

    Article 153. Council of Common Interests

    (1) There shall be a Council of Common Interests,

    in this Chapter referred to as the Council, to be appointed by the President.

    (2) The Council shall consist of

    (a) the Prime Minister who shall be the

    Chairman of the Council;

    (b) the Chief Ministers of the Provinces; and

    (c) three members from the Federal Government to be nominated by the Prime

    Minister from time to time.

  • (4) The Council shall be responsible to Majlis-e-Shoora (Parliament) and shall submit an Annual Report to both House of Majlis-e-Shoora(Parliament).

    154. Functions and rules of procedure.-

    (1) The Council shall formulate and regulate policies in relation to matters in Part II of the Federal Legislative List and shall exercise supervision and control over related institutions.

    (2) The Council shall be constituted within thirty days of the Prime Minister taking oath of office.

    (3) The Council shall have a permanent Secretariat and shall meet at least once in ninety days: Provided that the Prime Minister may convene a meeting on the request of a Province on an