Centre spent Rs5tr on devolved subjects in violation of Constitution, Senate panel head says

Why This Matters

Key context: <p>ISLAMABAD: The federal government spent more than Rs5 trillion on devolved provincial subjects and on ministries created on Council of Common Interests (CCI) matters in violation of the Constitution, the head of a Senate panel claimed on Tuesday.</p> <p>Citing data from the report of the Auditor General of Pakistan, Senator Barrister Zamir Hussain Ghumro, chairing a sub-committee of the Senate Functional Committee on Devolution, said the figure was equivalent to more than $18 billion.</p> <p>The convener said the country was facing twin issues of exorbitant federal expenditure and heavy borrowing totalling $135bn.</p> <p>“At present, federal government expenditure stands at around Rs19 trillion, while total tax and non-tax revenue was Rs20tr, leaving nothing for the provinces and forcing the federal government to resort to heavy borrowing,” Ghumro said.</p> <p>The PPP senator contended that had the government implemented the <a href="https://www.dawn.com/news/1565903">18th Amendment</a>, devolved provincial matters and handed over CCI matters to the permanent secretariat of the CCI as envisaged under Article 154 of the Constitution, the country would not have needed handouts from the International Monetary Fund (IMF).</p> <p>During the last 15 years, the IMF gave Pakistan $15bn, while the government spent $18bn to $20bn on devolved ministries and institutions, he claimed.</p> <figure class='media w-full sm:w-1/2 media--right media--embed media--uneven' data-original-src='https://www.dawn.com/news/2018197/senators-question-devolved-ministries-revival'> <div class='media__item media__item--newskitlink '> <iframe class="nk-iframe" width="100%" frameborder="0" scrolling="no" style="height:250px;position:relative" src="https://www.dawn.com/news/card/2018197" sandbox="allow-same-origin allow-scripts allow-popups allow-modals allow-forms"></iframe></div> </figure> <p>“Had this amount been spent on infrastructure and social development, Pakistan would have been a different country.</p> <p>“A taxpayer’s hard-earned money had been consigned to unauthorised expenditure,” he added.</p> <p>The convener said the federal government makes two kinds of expenditure from the Federal Consolidated Fund: “charged expenditure” on remuneration and other perks of the president, Senate chair and deputy chair, National Assembly speaker and deputy speaker, auditor general, high court and Supreme Court judges; and debt servicing, which the NA does not vote on, and “other expenditure” in the form of demands for grants by federal ministries created on federal subjects.</p> <p>“It must not spend a penny on provincial or other purposes,” Senator Ghumro stressed.</p> <p>“This is taxpayers’ money paid to the federal government to be spent for the purposes and services rendered by the federal government under the Constitution.</p> <p>“The federal government is not obliged to provide health, education, housing, sanitation, water or other services for which the Constitution empowers provincial governments.”</p> <figure class='media w-full sm:w-1/2 media--right media--embed media--uneven' data-original-src='https://www.dawn.com/news/2041353'> <div class='media__item media__item--newskitlink '> <iframe class="nk-iframe" width="100%" frameborder="0" scrolling="no" style="height:250px;position:relative" src="https://www.dawn.com/news/card/2041353" sandbox="allow-same-origin allow-scripts allow-popups allow-modals allow-forms"></iframe></div> </figure> <p>Senator Ghumro added: “A citizen cannot pay the federal government for purposes and services not rendered by it under the Constitution; hence such unauthorised expenditure of more than Rs5tr amounts to gross misuse of authority under the law and Constitution and must be accounted for legally.”</p> <p>He said neither the Ministry of Finance can send demands for grants for such expenditure nor the auditor general or Accountant General of Pakistan can authorise it.</p> <p>They have to see that the expenditure is for purposes and services to be provided by the federal government under the Constitution, he said.</p> <p>“Those matters are specifically mentioned in the <a rel="nofollow noopener noreferrer" target="_blank" class="link--external" href="https://www.pakistani.org/pakistan/constitution/schedules/schedule4.html">Federal Legislative List</a>. All powers under Article 142 are vested in the provinces except those enumerated for the federation in the Federal List.”</p> <p>Senator Ghumro said that, under <a rel="nofollow noopener noreferrer" target="_blank" class="link--external" href="https://www.pakistani.org/pakistan/constitution/part5.ch3.html#:~:text=Functions%20and%20rules%20of%20procedure">Article 154</a> (functions and rules of procedure of CCI) read with Article 97 (extent of executive authority of federation), executive authority over subjects mentioned in the Federal Legislative List’s Part II is to be exercised by the CCI and not the federal cabinet.</p> <p>The convener noted that the CCI and Cabinet Division had sent summaries to the prime minister to abolish 24 ministries and institutions, thus curtailing federal expenditure, but the prime minister had yet to respond.</p> <figure class='media w-full sm:w-1/2 media--right media--embed media--uneven' data-original-src='https://www.dawn.com/news/1922979'> <div class='media__item media__item--newskitlink '> <iframe class="nk-iframe" width="100%" frameborder="0" scrolling="no" style="height:250px;position:relative" src="https://www.dawn.com/news/card/1922979" sandbox="allow-same-origin allow-scripts allow-popups allow-modals allow-forms"></iframe></div> </figure> <p>He said that, even otherwise, such ministries would become redundant as the Auditor General of Pakistan and the finance ministry would not allow such expenditure.</p> <p>He directed the CCI and Cabinet Division to send a fresh note to the prime minister for abolition of ministries on provincial and CCI matters.</p> <p>In July, the Functional Committee on Devolution had <a href="https://www.dawn.com/news/2018083">expressed serious concerns</a> over the re-establishment of federal ministries on subjects devolved to the provinces under the 18th Amendment.</p> <p>It had also constituted a sub-committee to examine the alleged violations.</p> <p>During a meeting of that sub-committee last month, senators <a href="https://www.dawn.com/news/2037180">sought a probe</a> into a staggering Rs2.6 trillion expenditure by the federal government on education and health ministries.</p> <h2><a id="provinces-share-in-federal-appointments" href="#provinces-share-in-federal-appointments" class="heading-permalink" aria-hidden="true" tabindex="-1" title="Permalink"></a>Provinces’ share in federal appointments</h2> <p>The sub-committee also took up the matter of shares of provinces in federal appointments in ministries and corporations.</p> <p>The Establishment Division informed the committee that, as per its instructions, 5,000 jobs of Balochistan had been advertised to rectify its share as required under <a rel="nofollow noopener noreferrer" target="_blank" class="link--external" href="https://www.pakistani.org/pakistan/constitution/part2.ch2.html#:~:text=Promotion%20of%20social%20and%20economic%20well%2Dbeing%20of%20the%20people.">Article 38(g)</a> of the Constitution.</p> <p>Senator Ghumro said the committee had identified a shortage of more than 30,000 jobs in Balochistan’s share, which must be filled. The convener noted that a shortage of more than 80,000 jobs had been pointed out in Sindh, and that positions must be advertised to rectify it.</p> <p>The Federal Public Service Commission secretary informed the sub-committee that appointments for the shares of Sindh and Balochistan in services would be expedited as they had cleared the earlier backlog. He said a special CSS examination was conducted for these provinces.</p> <figure class='media w-full sm:w-1/2 media--right media--embed media--uneven' data-original-src='https://www.dawn.com/news/2000737/minister-chalks-up-css-failure-rate-to-lack-of-preparation-competitive-nature-of-exam'> <div class='media__item media__item--newskitlink '> <iframe class="nk-iframe" width="100%" frameborder="0" scrolling="no" style="height:250px;position:relative" src="https://www.dawn.com/news/card/2000737" sandbox="allow-same-origin allow-scripts allow-popups allow-modals allow-forms"></iframe></div> </figure> <p>The sub-committee observed that there was a meagre number of appointments of secretaries, CEOs and other high positions from Sindh and Balochistan.</p> <p>The convener said Article 38(g) envisages shares in all grades, and the federal government must submit a grade-wise position in grades 18 to 22 in 15 days.</p> <p>It must expedite the process through ministries in grades 1-15 positions, by FPSC in grades 16 and 17 positions and in grades 18 to 22 by the federal government and the prime minister. Compliance must be substantive and practical, he said.</p> <p>The Senate panel called for implementation, rather than “statements of intent”.</p> <figure class='media w-full sm:w-1/2 media--right media--embed media--uneven' data-original-src='https://www.dawn.com/news/2031022'> <div class='media__item media__item--newskitlink '> <iframe class="nk-iframe" width="100%" frameborder="0" scrolling="no" style="height:250px;position:relative" src="https://www.dawn.com/news/card/2031022" sandbox="allow-same-origin allow-scripts allow-popups allow-modals allow-forms"></iframe></div> </figure> <p>It also expressed displeasure over the non-submission of a report by the information ministry, which had <a href="https://www.dawn.com/news/2033304#:~:text=He%20requested%20one%20month">sought a month</a> to devolve print media organisations and functions at the federal level and develop a mechanism to give broadcasting rights to provinces under Article 159 of the Constitution.</p> <p>It directed the ministry to finalise all issues in 15 days and submit compliance.</p> <h2><a id="highly-sophisticated-silver-swapping-case" href="#highly-sophisticated-silver-swapping-case" class="heading-permalink" aria-hidden="true" tabindex="-1" title="Permalink"></a>‘Highly sophisticated silver swapping case’</h2> <p>Meanwhile, a separate Senate panel was briefed by the Federal Investigation Agency’s (FIA) Anti-Corruption Circle on a coordinated multi-city operation in connection with the <a href="https://www.dawn.com/news/1991431/two-customs-officers-arrested-for-allegedly-replacing-400kg-of-seized-silver-with-lead">silver swapping</a> and heist case earlier this year — involving alleged corruption, smuggling and suspected involvement of officials.</p> <p>Senator Saifullah Abro chaired a meeting of a sub-committee of the Senate Standing Committee on Interior and Narcotics Control.</p> <p>The panel was informed that during the investigation, it was revealed that the suspects had allegedly adopted a systematic modus operandi involving fabrication of fake container seals, counterfeiting, substitution of genuine silver with lead bars and concealment of the stolen consignment.</p> <figure class='media w-full sm:w-1/2 media--right media--embed media--uneven' data-original-src='https://www.dawn.com/news/1991431/two-customs-officers-arrested-for-allegedly-replacing-400kg-of-seized-silver-with-lead'> <div class='media__item media__item--newskitlink '> <iframe class="nk-iframe" width="100%" frameborder="0" scrolling="no" style="height:250px;position:relative" src="https://www.dawn.com/news/card/1991431" sandbox="allow-same-origin allow-scripts allow-popups allow-modals allow-forms"></iframe></div> </figure> <p>The investigation established that approximately 400 kilogrammes of silver had been swapped, out of which 214kg had so far been recovered, while the case involved an estimated financial loss of Rs4m. Legal proceedings had been initiated against the suspects, who were facing proceedings before competent courts.</p> <p>The FIA said the investigation was continuing through digital and financial forensics, asset tracing and other measures to identify all individuals involved and recover the remaining stolen silver.</p> <p>The Safe City director general explained that the theft had been carried out in a highly sophisticated and carefully planned manner.</p> <p>When the consignment reached Lahore, it was discovered that the original silver had been replaced with lead bars. He explained that one vehicle had initially been prepared for the operation. However, as it exited the airport, another identical vehicle approached from behind and carried out the swapping operation. The vehicle carrying the consignment was subsequently taken away. The entire sequence was detected through the Safe City surveillance system.</p> <p>Further investigation revealed that replica boxes had been prepared specifically for the operation, and the individual suspected of manufacturing and supplying these boxes was apprehended after four weeks.</p> <p>The Safe City DG also questioned the allegations of their involvement, stating that had they been involved, they would not have detected and exposed the swapping activity themselves.</p> <p>The chairman appreciated the FIA’s efforts and lauded the recovery of 214kg of silver.</p> <p>Abro remarked that the incident deserved to be made into a film.</p> <figure class='media w-full sm:w-1/2 media--right media--embed media--uneven' data-original-src='https://images.dawn.com/news/1185911'> <div class='media__item media__item--newskitlink '> <iframe class="nk-iframe" width="100%" frameborder="0" scrolling="no" style="height:250px;position:relative" src="https://images.dawn.com/news/card/1185911" sandbox="allow-same-origin allow-scripts allow-popups allow-modals allow-forms"></iframe></div> </figure> <p>He suggested that if Sindh had a dedicated film-making wing, or a similar facility existed in Balochistan, a film should be produced highlighting the entire incident, particularly how the theft was planned and executed and how it was subsequently detected through the Safe City surveillance system.</p> <p>The meeting was attended by Senator Umer Farooq and senior officials from relevant ministries and departments.</p> <h2><a id="records-sought-from-fbr" href="#records-sought-from-fbr" class="heading-permalink" aria-hidden="true" tabindex="-1" title="Permalink"></a>Records sought from FBR</h2> <p>The panel led by Abro also ordered the Federal Board of Revenue (FBR) to bring complete records of consumption certificates, payments and verification documents to an in-camera meeting on Nov 16, as it pursued the alleged misuse of the Fata/Pata tax exemption scheme involving imports worth Rs1,120bn and recovery of evaded taxes.</p> <p>The chairman expressed serious displeasure over the absence of the National Cyber Crime Investigation Agency’s (NCCIA) DG, questioning the “non-serious” attitude of the authorities, particularly when it had already been decided in the previous meeting that the DG would brief the committee.</p> <p>During the briefing, representatives of FBR and FIA presented their respective positions. The FBR maintained that it had not received any formal notice from the court, whereas the FIA informed the committee that its legal adviser had received the relevant court order.</p> <p>Senator Abro and panel members expressed concern over the apparent lack of coordination and questioned why the FBR had remained unaware of the court proceedings for nearly two months.</p> <figure class='media w-full sm:w-1/2 media--right media--embed media--uneven' data-original-src='https://www.dawn.com/news/2031971'> <div class='media__item media__item--newskitlink '> <iframe class="nk-iframe" width="100%" frameborder="0" scrolling="no" style="height:250px;position:relative" src="https://www.dawn.com/news/card/2031971" sandbox="allow-same-origin allow-scripts allow-popups allow-modals allow-forms"></iframe></div> </figure> <p>The committee was briefed on the reconciliation gap between Customs import data and consumption certificates for the period from 2018 to June 2026. It was informed that total imports amounted to Rs1,120.66 billion, against which consumption certificates covered imports worth Rs389.87bn, leaving an apparent unreconciled difference of Rs730.80bn.</p> <p>The sector-wise analysis revealed apparent differences of Rs148.25bn in steel, Rs146.96bn in textile/fabric, Rs100.88bnin food, and Rs76.49bn in ghee and oil. The committee emphasised the need for a comprehensive, transaction-wise reconciliation to ascertain the actual position and determine any potential tax liability or revenue loss.</p> <p>The FIA informed the committee that 512 notices had been issued to various companies in connection with the ongoing investigation, out of which 19 companies joined the proceedings with partial records, while more than 100 notices were returned or remained undelivered. The matter is under examination before the competent court, and proceedings are investigative in nature, aimed at obtaining relevant documents and explanations.</p> <p>Possible corruption, abuse of authority, diversion and wrongful release of securities are being independently examined in accordance with the law, the FIA added.</p> <p>Senator Abro said the committee had been pursuing the matter for a considerable period and the authorities must demonstrate seriousness and take concrete action instead of prolonging the proceedings.</p> <p>The panel was also briefed about the FBR’s reluctance to share relevant records with the parliamentary committee, particularly when the department was prepared to provide information to the court and other authorities.</p> <figure class='media w-full sm:w-full media--center media--uneven media--stretch' data-original-src='https://i.dawn.com/primary/2026/11/1017550246b8437.webp'> <div class='media__item '><picture><img src='https://i.dawn.com/primary/2026/11/1017550246b8437.webp' width='1598' height='299' srcset='https://i.dawn.com/thumbnail/2026/11/1017550246b8437.webp 300w, https://i.dawn.com/medium/2026/11/1017550246b8437.webp 500w, https://i.dawn.com/large/2026/11/1017550246b8437.webp 1200w, https://i.dawn.com/primary/2026/11/1017550246b8437.webp 1598w' sizes='(min-width: 1024px) 890px, 100vw' alt=' Senator Saifullah Abro chairs a meeting of a sub-committee of the Senate Standing Committee on Interior and Narcotics Control on Nov 10, 2026. &mdash; Senate of Pakistan/Website ' /></picture></div> <figcaption class='media__caption '>Senator Saifullah Abro chairs a meeting of a sub-committee of the Senate Standing Committee on Interior and Narcotics Control on Nov 10, 2026. — Senate of Pakistan/Website</figcaption> </figure> <p>Referring to Article 66 of the Constitution, Senator Abro asked the FBR to clarify the authorities to whom such records could legally be disclosed. The members stressed that parliamentary oversight must be respected and that legal provisions should not be used to delay accountability.</p> <p>The chairman sought a comprehensive explanation of the certificates, the amounts released against them and the supporting documentation. He particularly highlighted 20 certificates involving approximately Rs64bn and directed the FBR to provide complete details, including records and justification for their issuance. He further referred to the terms of reference concerning approximately Rs74bn and questioned the release of payments without adequate verification and scrutiny.</p> <p>Expressing serious concern over the financial implications, the chairman observed that the alleged tax liability associated with the matter could be substantial and that the state must recover every rupee legally due. He referred to an estimated amount of Rs1,120bn and stressed that the FBR must ensure proper assessment and recovery of applicable taxes.</p> <p>Senator Abro directed the FBR to examine the relevant Statement of Requirements (SOR) issued in 2021 and investigate whether the consumption certificates and subsequent releases had been processed in accordance with the applicable legal framework.</p> <p>The chairman also raised concerns regarding the large number of companies and petitioners involved in the proceedings and directed the FBR to examine the list of petitioners, verify their respective positions and issue notices wherever necessary.</p> <p>Referring to reports of individuals possessing substantial assets, large convoys of vehicles and unexplained sources of income, Senator Abro urged the FBR to investigate possible financial irregularities and money laundering. The members stressed that the investigation must also examine financial trails and possible involvement of influential individuals and networks.</p> <p>The committee further discussed the alleged movement and importation of <a href="https://www.dawn.com/news/2009023/fbr-tells-senate-panel-tobacco-tax-theft-is-rs40bn-not-1bn">tobacco-related material</a> through the Fata/Pata exemption regime and its subsequent use by companies operating outside the exempted areas.</p> <figure class='media w-full sm:w-1/2 media--right media--embed media--uneven' data-original-src='https://www.dawn.com/news/2009023/fbr-tells-senate-panel-tobacco-tax-theft-is-rs40bn-not-1bn'> <div class='media__item media__item--newskitlink '> <iframe class="nk-iframe" width="100%" frameborder="0" scrolling="no" style="height:250px;position:relative" src="https://www.dawn.com/news/card/2009023" sandbox="allow-same-origin allow-scripts allow-popups allow-modals allow-forms"></iframe></div> </figure> <p>The chairman observed that the issue involved a substantial loss to the national exchequer and required coordinated action by the FIA, FBR, Customs and other enforcement agencies.</p> <p>He directed the authorities to provide complete import records from January 2018 onwards, particularly details of consignments, their movement, destinations and companies involved.</p> <p>He also sought details of companies involved in importing material without payment of applicable taxes and directed Customs authorities to furnish records of imports through Khyber Pakhtunkhwa and former Fata areas, particularly for the period after June 2026. He emphasised the need to examine the tracking and movement of containers and to identify any misuse of the exemption mechanism through companies established in other parts of the country. The committee was informed that a significant number of companies had already been referred to the FIA for investigation, while further cases remained under examination.</p> <p>The chairman stressed that the investigation must be pursued without “fear or favour”, observing that the money involved belonged to the people of Pakistan. He also emphasised that wherever law-and-order constraints prevented officials from accessing certain factories, assistance of law enforcement agencies should be sought.</p> <p>The chairman directed that the next meeting, scheduled for Nov 16, be held in camera to examine sensitive financial and investigative records.</p> <p>The FBR was directed to bring complete details of all consumption certificates issued from Nov 2025 onwards, along with corresponding payments, pay orders, supporting documents and verification records. The authorities were also directed to provide complete details of the remaining companies under investigation without further delay.</p> <p>Furthermore, the KP Customs authorities were given four to five working days to furnish the required import and movement records, taking into account different routes and customs regimes through which consignments had been processed. The chairman directed that all relevant information be compiled and presented before the committee in the next in-camera meeting.</p> This development from dawn.com highlights ongoing changes in the sector.