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Event Title: Senator Zamir Hussain Ghumro, Convener Sub-Committee of the Senate Functional Committee on Devolution presiding over a meeting of the committee at Parliament House Islamabad
Event Date: 2026-10-14
Senate Devolution Committee Reviews Federal Expenditure on Provincial Subjects, Seeks Audit Details and Examines Proposed Privatization of Power Distribution Companies
The Sub-Committee of the Senate Functional Committee on Devolution met under the Convenorship of Senator Zamir Hussain Ghumro at Parliament House, Islamabad, to review federal expenditure on ministries, institutions, organizations, statutory bodies and corporations retained by the Federal Government despite despite provincial matters following the 18th Constitutional Amendment. The meeting also examined compliance reports from relevant federal departments and the status of matters concerning the Council of Common Interests (CCI).
The meeting was attended by Senators Jan Muhammad Buledi and Poonjo Bheel, Secretaries Cabinet, (CCI) Council of Common Interests, Establishment Division, the Special Secretary Establishment, the Additional Secretary Establishment, senior officers from the relevant departments.
At the outset, the report of the Auditor General of Pakistan (AGP) and the Accountant General of Pakistan on expenditure incurred by the Federal Government on ministries and institutions relating to provincial subjects were taken up. Chairman emphasized the importance of parliamentary oversight in ensuring compliance with the 18th Constitutional Amendment. He observed that, despite the passage of 16 years since the Amendment, concerns persisted regarding federal expenditure on subjects devolved to the provinces including education and health, which had been notified as provincial matters by the Implementation Commission.
Referring to Articles 168 and 169 of the Constitution and the relevant legal framework governing the audit of public expenditure, the Chairman questioned the authorization and constitutional basis of expenditure reflected in documents relating to two ministries of health and education amounting to approximately Rs. 2.6 trillion during last 16 years. He said that whopping expenditure of Rs 2.6 trillion by Federal govt only on two ministries of health and education which were de-notified in 2010 is misuse of tax payers money as Federal govt can spend only on its own subjects. He said this amount will touch many trillions of Rupees when expenditure made on ministries created on provincial subjects is submitted.
He expressed concern that the details sought by the Committee have not been submitted to the Committee within the stipulated timeframe and stressed that Parliament was the primary authority for authorizing public expenditure and that too on only Federal subjects, as public funds belonged to the people and required proper scrutiny by the Auditor General. He further emphasized that the Committee had a responsibility to examine whether expenditure on devolved subjects was consistent with the constitutional framework and called upon the AGP to clarify the basis on which such expenditure was authorized and audited. The AGP officials explained that their audit process was guided by budgets approved by the competent parliamentary forum, which determined the allocation of funds, and acknowledged certain limitations in their audit coverage. Chairman said that though budget is approved by National Assembly but it was the duty of Auditor General to see under section 8 of Auditor General of Pakistan( Functions and powers) Ordinance and Article 169 of the Constitution that expenditure has been authorized for the purpose and service to be provided by Federal govt under the Constitution.. He said expenditure from Federal Consolidatrd fund can’t be authorized for devolved provincial matters.
The Chairman directed the Committee to provide a prescribed proforma to the concerned officials for furnishing the required information. The AGP officials assured the Committee that the requested data would be provided within two weeks. The Committee emphasized the need for comprehensive documentation to facilitate effective parliamentary oversight of federal expenditure in the context of the 18th Constitutional Amendment.
Regarding compliance reports by the Permanent Secretariat of the Council of Common Interests (CCI), Cabinet Division, Privatization Commission/Division and Establishment Division, the Committee reviewed the status of compliance with its earlier directions. The CCI Secretariat informed the Committee that, in compliance with its instructions, a summary had been moved to the Prime Minister and that a response was awaited. The officials further stated that a CCI meeting scheduled for the 9th October could not be held due to prevailing circumstances.
The Committee subsequently examined the proposed privatization of power distribution companies (DISCOs), particularly in the context of Article 157 of the Constitution, provincial responsibilities and the role of the CCI. The Chairman questioned whether the proposed privatization was consistent with the constitutional distribution of powers, observing that electricity distribution and related matters involved provincial interests. He referred to previous judicial decisions and emphasized the need to examine whether the matter should be referred back to the CCI for consideration, particularly in view of the provinces’ constitutional role. The Chairman also stressed that transparency and accountability were essential and asked the concerned authorities to provide the relevant decisions and supporting documents for the Committee’s examination.
The Minister of Privatisation maintained that the legal and procedural requirements for the privatization process had been fulfilled. He explained that the National Electricity Policy 2021 had been formulated after obtaining recommendations from the provinces and that the privatization programme had subsequently been approved, with further work undertaken during 2023–24. He argued that referring the matter back to the CCI at this stage could cause significant delays, affect investor confidence and adversely impact the financial position of power distribution companies. Highlighting the substantial losses faced by the power sector due to electricity theft and operational inefficiencies, he stressed that the privatization process was necessary to improve performance and reduce the financial burden on the national exchequer.
The Chairman, however, emphasized that the constitutional position and the role of the CCI could not be overlooked. He referred to previous privatization initiatives and judicial proceedings, stressing the importance of ensuring transparency and protecting provincial interests. He questioned whether the relevant decisions had been taken in accordance with the constitutional framework and observed that the provinces, being represented in the CCI, should have an opportunity to consider matters falling within their domain. He also raised concerns regarding the constitutional basis of electricity distribution and asked the concerned authorities to submit the relevant five-year decision concerning the privatization of DISCOs, along with the record of the CCI’s decisions and any provincial reservations or responses.
The concerned officials informed the Committee that the CCI had taken 11 relevant decisions and that, according to the available record, no province had formally recorded reservations against the cited decisions. They assured the Committee that the relevant documents and details of provincial consultations would be shared. The Minister reiterated that all necessary legal requirements had been met and that referring the matter back to the CCI was not considered necessary at this stage, given the progress already made and the potential economic consequences of further delays.
The Chairman reiterated that the Committee’s examination was intended to ensure constitutional compliance, transparency and effective parliamentary oversight. He directed the concerned authorities to furnish the relevant decisions and supporting documents so that the Committee could assess the matter in light of the Constitution, previous judicial pronouncements and the respective responsibilities of the Federation and the provinces.
Chairman said that necessary documents must be submitted in order to examine the process from all aspects and further direction shall be given in the light of those documents which were not provided to the committee. However, he said constitutionally matter related to CCI .