PROVINCIAL AUTONOMY UNDER 18TH AMENDMENT

OUTLINES
1. WHAT IS FEDERALISM & PROVINCIAL AUTONOMY .............................................................................. 2
2. WHAT ARE RESIDUARY POWERS........................................................................................................... 3
3. HISTORY OF PROVINCIAL AUTONOMY ................................................................................................. 3
3.1. PROVINCIAL AUTONOMY UNDER 1956 CONSTITUTION............................................................... 3
3.2. PROVINCIAL AUTONOMY UNDER 1962 CONSTITUTION............................................................... 3
3.3. PROVINCIAL AUTONOMY UNDER 1973 CONSTITUTION............................................................... 4
4. PROVINCIAL AUTONOMY UNDER 18TH AMENDMENT .......................................................................... 4
4.1. SIGNIFICANCE OF 18TH AMENDMENT ........................................................................................... 5
4.1.1. ABOLISHING CONCURRENT LEGISLATIVE LIST ...................................................................... 5
4.1.2. Restoring Parliamentary Sovereignty ................................................................................... 6
4.1.3. Expansion of Civil Rights ....................................................................................................... 7
4.1.4. Presidential Powers Curtailed ............................................................................................... 7
4.1.5. A Limit to Cabinet Members ................................................................................................. 8
4.1.6. Caretaker Cabinet and Election Commission of Pakistan ..................................................... 9
4.1.7. Appointment of Judiciary ...................................................................................................... 9
4.1.8. Identity and Representation ............................................................................................... 10
4.1.9. Council of Common Interests under 18th Amendment ....................................................... 10
4.1.10. National Economic Council under 18th Amendment .......................................................... 11
4.1.11. National Finance Commission under 18th Amendment ...................................................... 11
4.1.12. Health under 18th Amendment ........................................................................................... 12
4.2. Issues and Pitfalls of 18th Amendment ....................................................................................... 12
4.2.1. Reforming Multi-Order Governance in Pakistan ................................................................ 12
4.2.2. The federal functions of the federal government .............................................................. 13
4.2.3.1. Natural Resource Ownership ................................................................................................. 13
4.2.3. A Road Block to Tax Reforms .............................................................................................. 13
4.2.4. Dysfunctional Finance ......................................................................................................... 14
4.2.5. Right Sizing the Federal Government ................................................................................. 14

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 4.2.6. Federal Government’s Lack of Access to Financing Instruments to Secure a Common
Economic Union .................................................................................................................................. 14
4.2.7. Increased Risks to Macro-Stability with Provincial Government Ownership of Financial
Institutions .......................................................................................................................................... 15
4.2.8. Potential for Confusing and Contradictory Regulatory Standards with High Transaction
Costs for Business and Citizens ........................................................................................................... 15
4.2.9. Potential for Greater Barriers to Goods and Factor Mobility ............................................. 16
5. Conclusion ........................................................................................................................................... 16

1. WHAT IS FEDERALISM & PROVINCIAL AUTONOMY

In the Federal form of state, powers are divided between the central and provincial governments.

Provincial Autonomy is such a system in which the government of the provinces is independent

from any external influence and does not rely on any of the external forces. Complete or absolute

provincial autonomy means complete sovereignty of the government of the provinces.

Pakistan is a federal state. According to the original concept that was stated in the resolution of

1940, Pakistan was meant to be a federation that consisted of self-governing or autonomous

units.

Crux of Pakistan resolution 1940 for provincial autonomy says: ―No constitutional plan would be

workable or acceptable to the Muslims unless geographical contiguous units are demarcated into

regions which should be so constituted with such territorial readjustments as may be necessary.

That the areas in which the Muslims are numerically in majority as in the North-Western and

Eastern zones of India should be grouped to constitute independent states in which the

constituent units shall be autonomous and sovereign‖

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 2. WHAT ARE RESIDUARY POWERS

Residuary powers are the powers which are neither prohibited nor explicitly given by law to any

organ of government. Such powers, as well as general power of competence, are given because it

is impractical to detail in legislation every act allowed to be carried out by the state.

In case of Pakistan, residuary powers rest with provinces not with central government.

3. HISTORY OF PROVINCIAL AUTONOMY

3.1. PROVINCIAL AUTONOMY UNDER 1956 CONSTITUTION

First republic was extensive one with 234 articles, 13 parts and 6 schedules. Pakistan had

unicameral legislature and representation in house was based on equality of east and west

Pakistan.

However, there were three lists of subjects; federal, provincial and concurrent comprising of 30,

94 and 19 subjects respectively. In concurrent list both federal and provincial governments could

legislate but in case of conflict on any subject’s legislation, federal law would prevail. In case of

residuary powers, article 109 stated that the provincial legislatures were given the authority of

making laws on subjects that were not mentioned in the three lists stated above. This

constitution vested emergency provision in the federal authority.

3.2. PROVINCIAL AUTONOMY UNDER 1962 CONSTITUTION

Second republic was consisted of 250 Articles, 12 parts, and 3 schedules. The constitution of

1962 was extremely centralized and shortened the sphere of the federating units to a large extent

and it enforced a unicameral legislature. Federal list of second republic had 39 subjects opposed

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to 30 subjects mentioned in 1956 constitution. The federal legislature had the authority to make

any law on the grounds of the national interests. Also, they could also make laws on provincial

matters when the provincial government gives this authority to federal government, on any

subject that is not listed in the third schedule.

It resulted in the strong provincial autonomy in East Pakistan and smaller provinces of West

Pakistan. Resultantly East Pakistan started demanding that the centre should only have defence,

foreign policy and currency and the rest of the powers should be delegated to the provinces. The

military operation against the people of East Pakistan to hold back the movement for highest

autonomy resulted in the increase of liberation movement which ultimately gave birth to

Bangladesh.

3.3. PROVINCIAL AUTONOMY UNDER 1973 CONSTITUTION

After debacle of East Pakistan, third republic was enforced comprising of 280 articles, 12 parts

and 6 schedules. This constitution brought in bicameral legislature having upper and lower

houses. Upper house had representation on equality basis while lower house had representation

on population basis. It had two lists federal and concurrent while resting residuary powers to

provinces because residuary powers were not listed in either federal or concurrent list.

National finance Commission (NFC) was formed to distribute financial resources between centre

and provinces perpendicularly and among provinces in parallel on population basis initially.

4. PROVINCIAL AUTONOMY UNDER 18TH AMENDMENT

The Eighteenth Amendment to the Constitution of the Islamic Republic of Pakistan, a landmark

event in the constitutional history of Pakistan, was passed unanimously with support from all

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political parties in the Parliament and lauded by the provinces. The Constitution (Eighteenth

Amendment) Act, 2010, received the assent of the President on April 19, 2010 and was

promulgated on the following day. The Act includes a total of 102 amendments, which have

amended, substituted, added or deleted various provisions of the Constitution. Primarily, the

amendment tries to rectify two arrangements. One is to empower the Parliament and the office of

the Prime Minister and the second is to increase resource share of the provinces.

4.1. SIGNIFICANCE OF 18TH AMENDMENT

The Eighteenth Amendment to the Constitution of the Islamic Republic of Pakistan, a landmark

event in the constitutional history of Pakistan, was passed unanimously with support from all

political parties in the Parliament and lauded by the provinces. The Act includes a total of 102

amendments, which have amended, substituted, added or deleted various provisions of the

Constitution.

4.1.1. ABOLISHING CONCURRENT LEGISLATIVE LIST

The Constitution (Eighteenth Amendment) Act, 2010, has deleted the Concurrent Legislative

List from the Fourth Schedule of the Constitution of the Islamic Republic of Pakistan. The

erstwhile Concurrent List featured forty-seven subjects on which both the Parliament and a

Provincial Assembly could legislate. All other subjects that did not appear either in the Federal

Legislative List or the Concurrent Legislative List were residuary in nature and powers to

legislate on such matters vested solely in the provinces. Omission of the Concurrent Legislative

List has granted the provincial assemblies with exclusive powers to enact laws in respect of any

matter that does not appear on the Federal Legislative List.

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With the abolition of the Concurrent Legislative List, the long-standing demand of the people of

Pakistan for provincial autonomy has come to fruition, and the provinces have at the same time

been provided legitimate constitutional rights in governance, and in managing and utilisation of

their natural resources.

Article 142(b) of the Constitution has vested the provinces with concurrent jurisdiction to

legislate in respect of criminal law, criminal procedure and the law of evidence. Article 142(c)

provides that a Provincial Assembly shall and Majlis-e-Shoora (Parliament) shall not have power

to make laws with respect to any matter not enumerated in the Federal Legislative List. As a

consequence thereof, a large number of subjects and activities previously being handled by

Ministries/Divisions in the Federal Government are now being administered exclusively by the

provincial governments.

4.1.2. Restoring Parliamentary Sovereignty

The amendment paves the way for democratic rule in the future and tries to block all the ways,

which were used in the past to derail the democratic system. It also repeals the Seventeenth

Amendment which was passed during the government of Gen. Musharraf. All of these laws have

been observed as the encroachments in the constitution made under military ruler and repealing

them means the proclamation that there is no place for dictatorship at least in the pages of the

constitution of Pakistan.

In order to block the way of any mischief with the sanctity of constitution, the suspension and

holding in abeyance of the constitution along with its abrogation and subversion have also been

added in the list of the forms of high treason. It has been added that the collaborators of coups

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would also be dealt in the same manner as the doers themselves. It was also fixed that such high

treason would not be validated by any court including Supreme Court and High Court.

The imposition of emergency has been made more difficult. In the new arrangement the

proclamation of emergency will have to be approved by both houses of the Parliament

separately, not in joint session which may be easier than this. If President alone decides for the

imposition of emergency it would be more difficult because this approval of both houses is

obligatory to be taken within only ten days.

4.1.3. Expansion of Civil Rights

Rights of education, fair trial and information have been added in the constitution and the clauses

about right of association have been repaired. A fair trial and due process has been made

obligatory in case of arrest and detention. Article 19A provided the right of information under

which every citizen has the right to have access to information in all matters of public

importance. Again for the first time the duty of state for education to all children of age 5 to 16

years has been included in the constitution (Article 25A).

4.1.4. Presidential Powers Curtailed

The powers of the President have been curtailed and the Prime Minister has been empowered

more like he was in constitution 1973. Instead of vesting the executive authority of the

Federation in the President, this authority would be exercised by the Federal Government in the

name of President. The Federal Government will consist of the Federal Minister and Prime

Minister who would be the Chief Executive of the Government. The President shall not appoint

or invite Prime Minister to hold office. On the other Prime Minister would be elected with

simple majority of the National Assembly.

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Presidential powers of dissolution of the National Assembly have also been curtailed. In other

conditions the discretionary power of the President to dissolve the National Assembly, as in

58(2)(b), have been deleted and for dissolution of the Assembly the President will have to follow

the advice of the Prime Minister or Cabinet. He, after dissolution, will have to fix a date of

election within ninety days and appoint a care-taker Prime Minister and Cabinet but it would not

be his discretionary right. He will have to select the caretaker Prime Minister and cabinet after

consultation with the Prime Minister and the Leader of Opposition in outgoing Assembly. Even

further members of the cabinet will be appointed by the President on the advice of the caretaker

Prime Minister.

4.1.5. A Limit to Cabinet Members

The number of ministers, including minister of state, has been limited to the 11% of the total

number of the parliament. This is now 49 out of 446 members of parliament. In case of

provincial assemblies it cannot be more than 15 or 11% of the total membership of the provincial

assembly.

By limiting the strength of the members of cabinet to 11 percent of the total number of

parliamentarians and by limiting the number of advisers for the Chief Ministers to 5 although the

amendment has made it difficult for the ruling parties to keep the independent members in their

fold through bribing them with ministries yet this will decrease the burden on the exchequer

through deduction of the expenses on a large number of ministers who are included in the cabinet

just to fulfill the political necessities of the government.

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 4.1.6. Caretaker Cabinet and Election Commission of Pakistan

The caretaker Prime Minister and members of caretaker cabinet shall not be eligible to contest

the elections during the period when they would be in power. Besides their immediate family

members – spouse and children – will also not be eligible to contest the elections under them.

This will enhance the impartiality in the elections and the caretaker government would interfere

less in the elections. Similarly in order to make the election of the Prime Minister and Chief

Ministers more transparent their elections would not be held by secret ballot.

For appointments of Election Commission the Prime Minister after consultation with the leader

of opposition in the National Assembly shall forward three names to the parliamentary

committee which will confirm one name. The maximum 12 members-Committee would be

constituted by the Speaker of National Assembly and comprise at least one third members from

Senate and having 50 percent representation from opposition and treasury benches each. The

members from opposition parties would be nominated by the respective parliamentary leaders

based on their strength in the parliament. If the National Assembly would be dissolved

committee would comprise members from Senate only.

4.1.7. Appointment of Judiciary

The appointment of Chief Justice of Pakistan is continued to be made by President of the senior

most judge of Supreme Court, an altogether new procedure has been introduced for the

appointment of the judges of Supreme, High and Shariat courts under amended article 175A. A

Judicial Commission, consisting of the Chief Justice of Pakistan, two senior judges of Supreme

Court, a former judge or Chief Justice nominated by the Chief Justice, attorney general, Minister

for law and a nominated lawyer from Pakistan Bar Council, would nominate one qualified

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person for one vacancy to be appointed as judge. The recommendation of judicial commission

would be viewed by a parliamentary committee formed of eight parliamentarians equal from

both houses and from government as well as opposition nominated by the leader of houses and

leaders of opposition. The members of the Commission and Committee will be taken from the

provincial judiciary and provincial governments as well as assemblies respectively in the case of

appointment of the judges of high court. The parliamentary committee can reject the nomination

of judicial commission by three-fourth majority. The president will appoint the person nominated

by judicial commission and confirmed by the parliamentary committee.

4.1.8. Identity and Representation

Article 1 amended to change name of NWFP to Khyber PakhtunKhawah which shows the

reflection of majority residing in that area but this amending in article 1 has also brought a sense

of deprivation in Hazara Region which 25% and 20% respectively in area and population of the

province. Another new Article 140-A which introduced local government to take financial

and political and administrative responsibility and authority is conferred to local representative

may be used for the satisfaction to the local areas to be archived.

4.1.9. Council of Common Interests under 18th Amendment

Council of Common Interest is a very significant body for coordination of federal affairs. Some

changes have been brought in articles dealing with this body. Article 153 dealing with the

Council of Common Interest has been amended to the effect that federal government nominates

only three members not four (equal strength of the Chief Ministers). Under Article 154, the

Council has been asked to maintain a permanent Secretariat and noting the importance of such an

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important body, it must meet at least once in ninety days. However, provinces can request more

meetings for urgent matters.

The Article 157 which deals with electricity has been amended and for any hydroelectric project,

a prior consent form the Provincial government is necessary and in case of dispute the matter

will be referred to the Council of Common Interest for resolution. Along with this many matters

such as major ports, census, national planning and national economic coordination, institutions

for higher education and research have been placed under Part II where the Council of Common

Interest will advise.

4.1.10. National Economic Council under 18th Amendment

Article 156 which deals with National Economic Council, an advisory body for financial,

commercial, economic and social policies has been elaborated and a substantive structure has

been added with the Chief Ministers nominating members; also the Council must meet at least

twice a year. Most importantly, for a consociational perspective, the amendment adds that the

advisory body shall ensure balanced development and regional equity.

4.1.11. National Finance Commission under 18th Amendment

While creating constitutional provisions for strengthening the institutional arrangements to

realize effective coordination amongst the federating units and the central government, Article

160 which deals with National Finance Commission has been amended. It has been agreed that

the share of Provinces in each Award of National Finance Commission shall not be less than the

share given to the Provinces in the previous Award. Alongside, the Federal Minister and the

Provincial Ministers for finance have been asked to monitor the implementation biannually and

lay their reports before the national and provincial assemblies.

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 4.1.12. Health under 18th Amendment

By virtue of exclusion of concurrent list and shifting of some health related subjects to federal

list, the provinces will be more empowered to operate their respective health systems, financially

and administratively. The second part of the Federal Legislative List (FLL) is influenced by the

Council of Common Interests (CCI). The CCI has even representations from the parliament and

the provinces and has attained a significant role in formulation and regulation of policies for all

the subjects including health after the abolition of the Ministry of Health. The federal

government can only legislate on the subjects in second part of federal list after consultations

with the provincial representatives of CCI. Subsequently, many of the functions of the abolished

MoH are now delegated to eight institutional settings in the capital and service delivery entirely

to the provinces.

4.2. Issues and Pitfalls of 18th Amendment

While the discussion and debate leading up to the passage of 18th Amendment represented a

unique opportunity—the only one after the enactment of the 1973 constitution—this opportunity

has been largely lost as the amendment has failed to address some of the fundamental challenges

of fiscal federalism in Pakistan. This is discussed below.

4.2.1. Reforming Multi-Order Governance in Pakistan

This would have required a comprehensive review of the roles and responsibilities of all orders

of government—federal, provincial, local, and beyond government—in delivering public

services (see Shah, Ahmad, Boadway, Chaudhry, Huther, Mukhtar, & Pasha, 1996; Shah, 1997

for pathways to such reform). Instead, the amendment simply focuses on devolving functions

from the federal government to the provinces to the neglect of rationalizing the former’s central

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functions or the latter’s provincial functions. It also completely neglects the role of local

governments and beyond-local-government entities in public services delivery.

4.2.2. The federal functions of the federal government

Securing a common economic union; a harmonized tax system; protecting minorities and

disadvantaged groups; and dealing with natural disasters, emergencies, and calamities such as

floods and earthquakes are considered among the core functions of the federal government but

have been left out of federal domain. At the other extreme, a purely local function, such as the

People’s Works Program, has been centralized to the Prime Minister’s Office despite its already

being overloaded with work.

4.2.3.1. Natural Resource Ownership

For political and economic union, it is important that ownership of the country’s natural

resources be vested in the nation as a whole, and that the revenues from those resources be

invested in a national heritage fund rather than being made available to any order of government

for current use. All citizens of Pakistan would hold equal shares in this fund and receive annual

dividends as done in Norway. Various orders of government would be eligible to receive a

fraction of the fund’s earnings for investment in long-lived assets. In Pakistan, ownership of

natural resources is currently vested in the provinces, to which current revenues accrue. This

creates both the potential for ―Dutch disease‖ as well as interprovincial conflict. Pakistan has

already experienced serious interprovincial conflict in water and gas distribution across the

provinces.

4.2.3. A Road Block to Tax Reforms

In tax areas, by reasserting the powers of the provinces to tax agricultural income, capital gains,

and services, the amendment may have blocked avenues for reform in creating a modern income
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and sales tax system in Pakistan. Instead, it has strengthened opportunities for tax evasion by

enabling tax arbitrage by potential taxpayers who can now shift their income to agriculture and

business expenses from higher taxed sectors or sources of income.

4.2.4. Dysfunctional Finance

A decentralized fiscal system works best when expenditure decentralization is accompanied by

tax decentralization so that spending decisions and any associated tax increases have to be

presented to the public and defended. This helps control the leviathan tendencies associated with

a reliance on higher-level fiscal transfers to finance subnational expenditures. The amendment

has missed the opportunity to realign finance with function according to the order of

government, which would have allowed greater accountability.

4.2.5. Right Sizing the Federal Government

Even in the implementation of the amendment, the federal government has failed to seize the

opportunity to realign its organizational structure with the new mandate. Instead, it has retained

all redundant employees and continues to finance vertical programs as though it was financing its

line agencies rather than instituting grant programs with specific objectives and accountability

mechanisms. It has also allowed the Planning Commission, Higher Education Commission, and

National Centre for Human Development to continue without rethinking their roles and

appropriate new institutional structures to perform those roles.

4.2.6. Federal Government’s Lack of Access to Financing Instruments to Secure a

Common Economic Union

The amendment does not revisit the financing of the provincial governments through fiscal

transfers. The NFC awards have the twin objectives of dealing with the vertical fiscal gap and

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horizontal equalization. With the devolution of social services and infrastructure responsibilities

to the provinces, the federal role in providing financing for these services to set national

minimum standards for merit services and to secure common economic union gains prominence.

At present, however, there is no instrument available to further the federal government’s

spending power to advance national objectives.

4.2.7. Increased Risks to Macro-Stability with Provincial Government Ownership of

Financial Institutions

The 18th Amendment has also empowered provinces to borrow from domestic and international

sources, subject to conditions imposed by the National Economic Council. However, the Council

may not be able to discipline such borrowing as effectively as provinces’ own banking and other

financial and nonfinancial institutions.

4.2.8. Potential for Confusing and Contradictory Regulatory Standards with High

Transaction Costs for Business and Citizens

Even in the areas with which it is concerned, the amendment has created major anomalies. For

example, national uniform standards are required for drug approval; pharmaceutical regulations;

food and agricultural safety inspection; the control and disposal of hazardous materials and

waste; water and air pollution; highway safety standards; consumer product safety standards; and

social safety nets. These areas have now all been relegated to the provinces, creating potential for

a jungle of confusing and contradictory standards with high compliance and administration costs.

Imagine the consequences for businesses and consumers if each province were to decide to set

up its own food and drug regulatory agency as stipulated by the amendment.

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 4.2.9. Potential for Greater Barriers to Goods and Factor Mobility

Finally and most importantly, the 18th Amendment has failed to institutionalize any constraints

on barriers to factor and goods mobility across the country. Instead, it has opened up the

potential for such barriers by recognizing provincial authority to discriminate against

nonresidents. Article 27(2) of the amendment overrides the safeguard against discrimination in

employment by empowering provinces and local governments to institute a three-year local

residency requirement. This poses a serious risk to economic union in Pakistan.

5. Conclusion

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