beyond public finance

Beyond Public Finance: Towards Constitutional Poli…

Taxation, constitutional legitimacy & fiscal justice

The previous Part VII of this series traced the contributions of Abu Yusuf, Al-Ghazali, Ibn Taymiyyah, Al-Maqrizi and Ibn Khaldun to public finance and political economy. Their works differed in purpose and historical setting, but a common normative framework emerged: justice in public burdens, accountability of authority, consultation in collective decisions, protection against arbitrary appropriation, honest exchange, responsible administration of public resources, wider circulation of wealth and protection of vulnerable citizens.

These principles do not provide a ready-made tax code for a modern federation. They offer something more fundamental: standards by which taxation, expenditure and public authority may be judged.

The same standards find expression in the constitutional order of Pakistan. Taxation is not legitimate merely because money is required by the state or because a provision has been inserted into a Finance Act.

Parliament possesses wide legislative authority, but it is a creature of the Constitution and not its master. It cannot validly enact what the Constitution prohibits, invade a field constitutionally assigned elsewhere or destroy rights and limitations that bind every organ of the state. The proposition appears elementary. Pakistan’s fiscal practice repeatedly ignores it.

Article 77 of the Constitution provides that no federal tax shall be levied except by or under the authority of an Act of Parliament. This embodies the historic principle of no taxation without representation. Revenue cannot be extracted through executive preference, administrative instruction or unstructured discretion. Legislative authority must exist.

Article 77 is a necessary condition for lawful taxation, not a complete test of constitutional legitimacy. A tax enacted by Parliament must also conform to the distribution of legislative powers, equality before law, due process, protection of property and other constitutional guarantees.

Parliamentary form cannot cure substantive constitutional defect. Otherwise, the requirement of constitutional supremacy would be reduced to the proposition that Parliament may do anything so long as it records the command in statutory language. Pakistan is not governed under parliamentary sovereignty in the British sense. It is governed under a written and supreme Constitution.

Legislative authority is not unlimited authority

The Constitution divides taxing powers between the Federation and provinces. Parliament cannot convert a provincial subject into a federal one merely by changing its label. A levy upon capital value cannot automatically become income tax because it is placed in the Income Tax Ordinance, 2001. A tax upon services cannot be extended to transactions lacking the character of a service merely because additional revenue is desired.

The true nature, subject matter and effect of the levy remain decisive. This is particularly important because fiscal pressures create incentives to stretch legislative entries beyond their constitutional purpose.

Governments confronting debt servicing, defence expenditure and programme targets naturally seek accessible revenue. Constitutional limitations exist precisely because necessity, convenience and expediency cannot be allowed to determine the boundaries of public power. A Constitution does not become less binding when the treasury is empty.

The Supreme Court’s jurisprudence has recognised that Parliament’s taxing competence, though broad, is not without constitutional limits. In Elahi Cotton Mills, the Court accepted substantial legislative latitude in taxation, including the use of legal fictions, classifications and presumptive methods. It also made clear that the legislature cannot tax as “income” something that cannot rationally possess the character of income. The breadth of a legislative entry does not eliminate its essential subject matter.  The same discipline must govern every fiscal enactment.

Equality is not arithmetical uniformity

Article 25 guarantees equality before law and equal protection of law. Equality does not require every person, transaction or source of income to be taxed identically. Legislatures may classify taxpayers and activities where a real distinction exists and the classification bears a rational relationship to the purpose of the law. The power to classify cannot become a licence to privilege.

Pakistan’s tax system contains numerous distinctions based upon source, status, sector, documentation and bargaining power. Salary, dividends, profit on debt, business income, contracts, imports, property income and capital gains are frequently subjected to different rates and regimes. Some differentiation may be justified by collection realities or constitutional allocation. Much of it has emerged through political accommodation rather than coherent principle.

A constitutional analysis must therefore ask whether similarly situated persons are treated alike, whether distinctions correspond to genuine economic differences, and whether the burden imposed is reasonably connected with the stated objective.

Higher transactional taxes upon “non-filers”, for example, are presented as instruments of documentation. Their constitutional and economic legitimacy becomes doubtful when they operate indefinitely as revenue measures without determining actual income, establishing liability or bringing the person into a genuine assessment system. A temporary incentive to file cannot become a permanent substitute for income taxation.

Due process in fiscal administration

Article 4 protects the right of every person to be dealt with in accordance with law. Tax administration must consequently involve more than statutory authority to demand money. Liability must be determined through fair procedures, relevant evidence, a meaningful opportunity to respond and access to independent adjudication.

Automated notices, coercive recovery, attachment of accounts, blocked refunds and repeated demands without proper examination undermine this constitutional relationship. Technology does not suspend due process.

Digital systems can improve matching, risk identification and transparency. They cannot transform an algorithmic suspicion into established liability. The taxpayer must know the basis of the demand, confront the material relied upon and obtain a reasoned determination from a legally competent authority. A revenue system that collects first and examines legality later converts constitutional administration into fiscal compulsion.

The Supreme Court’s judgment in Mustafa Impex also reinforced the constitutional identity of executive authority. Statutory powers assigned to the Federal Government cannot automatically be exercised by an individual minister, division or official unless the constitutional and statutory framework permits it.

Fiscal measures made through notifications and delegated authority must remain within the limits imposed by the parent legislation and the constitutional structure of government.  Delegation may supply machinery. It cannot create a new taxable event, enlarge the charge or transfer essential legislative choices to the executive.

Property, consent and public purpose

Taxation necessarily affects property. The Constitution permits lawful taxation and does not convert every fiscal burden into unconstitutional deprivation. The state may require citizens to contribute towards public purposes. The constitutional concern arises when extraction becomes arbitrary, discriminatory, confiscatory or disconnected from lawful competence.

The moral traditions discussed in the previous part treated public revenue as a trust rather than the personal entitlement of the ruler. Modern constitutional government expresses the same principle through representative authorisation, public accounts, legislative oversight, audit and judicial review.

Revenue belongs neither to the government of the day nor to the bureaucracy collecting it. It is held for constitutionally legitimate public purposes. This dimension is often lost in debates dominated by the tax-to-GDP ratio. The state’s claim to additional revenue is discussed independently of the manner in which existing resources are spent.

Citizens are asked to contribute more while debt servicing, administrative waste, privileges, untargeted subsidies, losses of state-owned enterprises and non-transparent expenditure continue. Fiscal legitimacy has two sides: justice in collection and accountability in expenditure.  A tax system cannot command durable consent when citizens perceive that sacrifices are widely imposed but benefits and privileges remain concentrated.

Consultation and representative consent

Consultation is not satisfied by formally passing a Finance Bill under compressed parliamentary procedures. Meaningful representative consent requires disclosure of the purpose, incidence and constitutional basis of proposed taxes.

Parliamentarians must receive sufficient time and information to understand who will bear the burden, what alternatives exist and how the revenue will be used. Pakistan’s practice of introducing major substantive changes through annual Finance Acts weakens this process. Complex amendments affecting rights, liabilities and institutional powers are frequently enacted with limited scrutiny. Delegated legislation then adds exemptions, procedures, valuations and collection obligations outside meaningful parliamentary debate.

The Constitution requires legislation. Constitutional political economy requires informed legislation. Public participation also matters. Trade bodies, professionals, workers, consumers, provinces and local governments should not be heard only according to their capacity to lobby. Consultation must be transparent enough to prevent organised privilege from masquerading as public interest.

Wider circulation of wealth

A constitutionally legitimate fiscal system cannot remain indifferent to extreme concentration of wealth and opportunity. The Principles of Policy [Article 29 to Article 40] require the state to reduce inequality, prevent concentration of wealth and provide basic necessities. These provisions are not directly enforceable in the same manner as Fundamental Rights [Article 8 to Article 28], but they articulate the social purposes for which public power and revenue exist.

Taxation should therefore support wider access to education, healthcare, justice, infrastructure and economic opportunity. It should restrain unproductive privilege without penalising enterprise, savings or capital formation.

This requires careful balance. Confiscatory taxation can destroy incentives and production. Regressive taxation can preserve wealth at the top while burdening consumption at the bottom. Exemptions ostensibly designed to promote investment can become permanent transfers to organised interests.

Fiscal justice lies neither in maximising extraction nor in protecting accumulated privilege. It lies in imposing reasonable and predictable burdens according to capacity, while using public resources to enlarge human and productive capability.

When lawful taxation becomes fiscal coercion

Fiscal coercion begins when the state treats statutory enactment as the end of constitutional inquiry. Its symptoms are familiar: gross receipts taxed without regard to income; private persons converted into unpaid collectors; refunds retained as involuntary financing; executive notifications used to alter substantive burdens; documented taxpayers repeatedly targeted because they are accessible; and politically influential sectors protected because they are difficult to confront. Such a system may collect revenue. It weakens citizenship.

The relationship between taxpayer and state cannot be built upon fear alone. Sustainable revenue requires legitimacy, predictability and confidence that rules apply equally. Ibn Khaldun understood that the state eventually damages its own foundations when increasing expenditure produces heavier extraction, declining incentives and contracting productive activity. The modern Constitution supplies enforceable restraints against that decline.

A just tax system must satisfy more than the requirements of arithmetic. It must rest upon legislative competence, representative consent, rational classification, due process, protection against arbitrary deprivation, transparent expenditure and effective remedies. Parliament must levy taxes.

Parliament cannot constitutionalise injustice merely by enacting it. Pakistan’s fiscal crisis will not be resolved by asking citizens to finance an unreformed state through increasingly coercive instruments. The state must first establish that its demands are lawful, equal, accountable and directed towards a constitutional public purpose. Only then can taxation become an expression of citizenship rather than an instrument of extraction.

In the concluding part, we shall apply these principles to contemporary proposals for closing Pakistan’s tax gap and ask what it would take to reconstruct—not merely refinance—the fiscal state.

[To be continued]

____________________________________________________________________

Dr. Ikramul Haq, Advocate Supreme Court, Adjunct Faculty at Lahore University of Management Sciences (LUMS), member Advisory Board and Visiting Senior Fellow of Pakistan Institute of Development Economics (PIDE), holds an LLD in tax laws. He was full-time journalist from 1979 to 1984 with Viewpoint and Dawn. He also served Civil Services of Pakistan from 1984 to 1996.

Similar Posts

  • Increasing Pakistan’s Water Resilience

    Stockholm Resilience Centre defines resilience as the capacity of a system to deal with change and continue to develop. System can be an individual, a forest, a city or an economy. In simple words, resilience refers to the ability of an ecosystem to deal with disturbances and returns to its former state. When it comes to water resource management in Pakistan, unfortunately, we are not managing our water resource as sustainably as we should. WWF Pakistan points out a robust difference in water consumption between communities in Pakistan. Those who can afford uses 10 times more water than global average that stands at 10 gallons a day. On the contrary, poor lacks access to water in Pakistan. How sad it is that there exist two different water realities in Pakistan. On one hand, we have people that uses 100 gallons of water each day. On the other hand, we have masses that don’t even have access to water. We must put an end to existing water inequality in Pakistan. Water forms the backbone of our society and economy and without sustainable water management practices in place, we can neither have socially equitable society nor can we achieve sustainable economic growth for Pakistan. We must ensure that each person in Pakistan should have access to clean water regardless of geographical location and financial resources at disposal. If we really want to achieve Sustainable Development Goals (SDGs) for Pakistan, we must end water inequality in Pakistan. An access to clean water is a basic human right and thus it should be available to all in the country. It is important to mention here that each of the 17 Sustainable Development Goals (SDGs) is strongly coupled with how we manage water as a natural resource. If we mange water wisely (with tomorrow in mind), we can easily achieve all 17 SDGs for Pakistan. However, an unsustainable water resource management will act as Achilles heel and prevent us in realizing Sustainable Development Goals. We certainly need a paradigm shift in managing water as a resource in Pakistan. Ministry of Planning, Development and Special Initiatives (Government of Pakistan) highlights that at the time of independence, per capita water availability in Pakistan was over 5000 cubic meters each year. Unfortunately, today, per capita water availability in Pakistan is sharply reduced to roughly 1000 cubic meters per person each year. In other words, each person in Pakistan now only has 1/5 of the water available every year, when compared to 1947 (at the time of independence). Public policy makers in Pakistan must tackle decreasing per capita water availability in Pakistan with utmost seriousness and do all it takes to tackle it in the most sustainable manner. Before we head on to solutions, we must understand the root causes of decreasing per capita water availability in Pakistan. According to Australian Centre for International Agricultural Research (ACIAR), population in Pakistan has increased 7-fold since independence in 1947. Naturally, when we distribute the same amount of water we have each year on 7 times more population, the per capita water availability in Pakistan would then sharply reduce. ACIAR then stresses on the fact that irrigated agriculture in Pakistan consumes 95% of surface water supply in the country. Another report from Pakistan Council of Research in Water Resources (PCRWR) highlights that irrigated agriculture consumes 93% of the available water resource and acts as the single largest sector of economy employing 44% of the labour force, generating 60% of the foreign exchange earnings and produces roughly a quarter of Pakistan’s gross domestic product (GDP). The already spoken report from PCRWR then points out that Pakistan waste 60% of water from canals to farm gates. Do you know that per capita water storage ability of Pakistan is roughly 159 m3? On the contrary, the per-capita water storage ability of USA and Australia is over 5000m3, followed by China with a per-capita water storage ability of 2200m3, Egypt 2362 m3, Turkey 1402 m3 and Iran with 492m3. PCRWR further indicates that inadequate water storage ability has forced Pakistan to lose 120 BCM of water during floods of 2010, 2012 and 2014. If Pakistan had ample surface water storage infrastructure in place, it could had saved at least half of 120 BCM of surface water that could then be used to increase per-capita water availability in the country. The remaining 60 BCM of floodwater could restore Indus River Delta where many species are fighting for their survival due to reduced river flow. There is a dire need for Pakistan to build small, medium and large dams to store surface water. Doing so, will increase surface water availability on year-round basis, decrease flood related damage to agricultural lands and infrastructure, increase per-capita water availability, reduce reliance on underground water, recharge aquifers and mitigate their depletion. We have what it takes to build a series of small, medium and large dams in Pakistan to harvest floodwater during monsoon season. Do you know that 1 billion cubic meters of water has 1 trillion litres of water? Now imagine, if 50 litres of water cost 1 USD, the price tag of 1 billion cubic meters (or 1 trillion litres) of water would be 20 billion USD. Thus, a cumulative cost for 60 BCM of floodwater would roughly be USD 1200 billion. Now, if we would sharply reduce the already spoken figure to its one-tenth, the cost would still be a whooping USD 120 billion for 60 BCM of floodwater. We must understand that this is just the price of water. It is crucial to mention here that water forms the basis of all sorts of social and economic development, and we must learn to manage water sustainably to ensure a resilient Pakistan for all. We must invest heavily in constructing dams of all sizes to increase surface water availability and to enhance per-capita water in Pakistan. Here is an example. Do you know that Sweden has roughly 10,000 dams to manage surface water. It is quite simple, the

  • The Ugly Truth of Bacha Bazi

    What happens when the misogynistic cultural mindset of men forces them to lock the women in  their community inside four brick walls and suddenly there are no women to harass and assault on the streets? Some may assume that now they may only assault their wives, sisters and daughters inside their homes, unfortunately that is far from the truth. This in contrast induces them to prey on adolescent boys who are young enough to have a feminine innocence installed in them.   In Afghanistan and many parts of Khyber Pakhtunkhwa in Pakistan, there is a horrendously horrific custom known as Bacha Bazi in which old men scout, groom and buy young boys from their families, or forcefully take the ones who are orphans on the run trying to survive. The literal meaning of Bacha Bazi translates into ‘Boy Play’ which is an illegal abuse normalized by the majority.   These underage boys possess soft features, hairless bodies and no voice. They are forced to wear clothes of women, often dresses and skirts. They are taught to dance, sing and to be painfully silent. This can be located and traced back to the poverty in these provinces where selling daughters and sons can be the only possible course of action to avoid starvation. Many documentaries have been filmed as well as the interviews of the culprits who are asked the possible reason of their disgusting misdoings to which they have only one answer – ‘it is our need’.   Another terrifying leisure activity is quite common among the truck drivers, however not much of the population possess any knowledge of it. The overwhelming majority of these drivers on the road for hours each day have an underage boy with them to use in ways not comprehensible to most. The district police, politicians and those in charge are extremely aware of this filth- yet they choose to blind themselves and no just action is ever taken. These men pollute this world with their abusive methods and turn the abused into the next abuser. It can be said that many of these rapists were in fact themselves hunted upon from a very young age.   People yearn for women rights every hour of the day- yet they somehow forget to raise their voices for these young boys who do not know what family, protection or a warm bed is. We point out the West of having billionaires who rape little children but we forget that our own country allows the same violations to be performed by ordinary low income men.   Imagine being born in this world, your mother died in childbirth and if alive is covered with bruises, your sisters were sold at the age of six so you could eat and now the money is running out and the only way to survive is for you to dance for older men in skirts so your younger siblings can go without starving. This is the reality of millions of young boys untold and unheard of.   Thousands of gatherings take place everyday where these young boys perform for their ‘owners’ no matter how tired, exhausted or embarrassed they may feel. Once they turn 18 and are no longer young enough to satisfy the technical needs of pedophiles, they are often employed with sustainable enough wages to teach the younger recruits on the tricks and methods of performing and satisfying. Hence the cycle repeats and a chain is formed.

  • 79th Independence Day – Quaid’s lost d…

    Many Pakistanis, especially the youth in colleges and universities, while celebrating Independence Day every year (August 14, 2026, marks seventy-ninth), express bafflement as to how a state purportedly created in the name of ‘Islam’ is juxtaposed with the term ‘Republic. They wonder how a Parliament, where majority is not that of theologians, working under Westminster model, retains, amends and enacts mainly Anglo-Saxon laws and yet claims that Shariah is supreme. In Europe and the United States and elsewhere, the term republic connotes a State that precludes monarch and clergy. In our context, the predominant view (though totally misconceived) is that divorced from religion, politics is “changezee” (chaos, anarchy and disorder). جلالِ بادشاہی ہو کہ جمہوری تماشا ہو جدا ہو دیں سیاست سے تو رہ جاتی ہے چنگیزی What poet Dr. Muhammad Iqbal emphasizes in the couplet, Jallah badshahi ho ya jamhori tamasha ho; Juda hon deen siyasat se, to reh jati hai changezee, is that ethics contained in holy Quran should be part and parcel of governance. The majority misconstrue deen (Quranic term seerat-e-mustaqeemright path) as conventional mazhab (religion). By reading the second stanza in isolation, the clergy interprets and insists that politics should only be in the name of their brand of conventional (orthodox) religion. They and many others conveniently ignore the first stanza of the couplet. The couplet unambiguously conveys that whether it is monarchy or democracy, governance sans ethical framework of deen is changezee. With conventional mazhab comes Shariah that is a contentious issue since the adoption of Objectives Resolution of 1949. In a fragmented society marred by sectarian hatred (not merely genuine differences over interpretation of Islamic laws) it has becomes a permanent source of conflicts with claims and counter claims on how to run the State. Ziauddin Sardar (born in Lahore and who left Pakistan in 1960 at the age of nine, now author of not less than fifty books with world-wide acclaim of a public intellectual specialising in Muslim thought) says that if you equate Islam with state, then religion becomes a reason of the state and that state becomes the power of religion. Basically you produce a totalitarian system”. Ziauddin elaborates that the very idea that “Islam is equal to state is a totalitarian equation. We dont have to go very far; we just have to see recent history. Wherever Islam has been equated with state, we have produced totalitarian systems, like Iran, Saudi Arabia, Sudan, Afghanistan, you name it”. Of course, Saudi Arabia is now drifting away from influence of clergy, but not monarchy. According to critics of Objectives Resolution, it was a departure from the ideals of Quaid-e-Azam, Muhammad Ali Jinnah, of equality for all citizens and his principles of fair governance. Using it as a ploy, they say that all governments, both military and civilians, managed to convert Pakistan into an exploitative State where ultimately the Shariat Court held land reforms against Islam. According to them, Quaid-e-Azam did not want to make Pakistan a theocratic but certainly an egalitarian state. Objectives Resolution, passed by the first Constituent Assembly on March 12, 1949 under Liaquat Ali Khans leadership is undoubtedly one of the most important documents in the constitutional history of Pakistanit served as preamble for the Constitutions of 1956, 1962 and eventually became part of the 1973 Constitution when the Eighth Amendment was passed in 1985. The proponents of Objectives Resolution claim that it confirms the true genesis of Pakistan by reiterating, Sovereignty of the entire Universe belongs to Allah alone and authority should be delegated to the State through its people under the rules set by Allah”. Therefore, it has become a blend of Islam and Western democracy. Liaquat Ali Khan explained the context of the resolution in his speech delivered in the Constituent Assembly on March 7, 1949 claiming it to be “the most important occasion in the life of this country, next in importance only to the achievement of independence”. He said that we as Muslims believe that authority is vested in Allah Almighty and it should be exercised in accordance with the standards laid down in Islam. He added that this preamble had made it clear that the elected persons would exercise the authority, which is the essence of democracy, and it eliminates the dangers of theocracy. The events that followed proved him wrong as clergy started asserting its own authority instead of that of Allahs by saying religion is what we interpret”. The logical outcomes of the Objectives Resolution were: (a) movement against Ahmadis, (b) clergys campaign against Ayub Khans regime in the name of Islam, (c) support of religious parties and right wing to military crackdown in East Pakistan culminating into dismemberment of the country and (d) Zulfikar Ali Bhuttos compromises with religious leaders. The matter did not end there. It paved the way for an 11-year dictatorial and nightmarish rule [1977-1988] of General Ziaul Haq. Zias legacy was reflected in the formative political years of Mian Nawaz Sharif, three time elected Prime Minster of Pakistan. Military dictator late General Pervez Musharraf who deposed Nawaz Sharif on October 12, 1999, and all others who followed him failed to undo Zias legacyunfortunately since 1977, religious bigotry is haunting us. The militants and terrorists derive their ideological strength from the notion that real authority rests with Allah and they are waging jihad to make Pakistan a true Islamic polity. The Objectives Resolution, being part of our Constitution, though emphasizes existence of a Muslim State based on the principles of justice and equity for all, yet contradicts the concept of a secular State free of any religious obligations. Shariah as body of laws cannot be free of sectarian biases, thus, one cannot reconcile the two conflicting ideas. For example, in Indonesia, the debate whether you can have an Islamic state was a long drawn one with much depth, and they finally reached the conclusion that Islam and politics are linked, not through the state but through a civic society. It means that if you are a

  • Jalalpur Canal: Politics, Procedure and Sindh&#821…

    Just as the BRB Canal is often regarded as Lahore’s lifeline, the Indus River occupies a similar position for Sindh. It is, therefore, unsurprising that the river has remained at the center of the province’s political discourse for decades. Yet, since the passage of the 18th Constitutional Amendment, few issues have continued to unite Sindh’s population across political divides and enable a collective political stance at the federal level. Today, the province’s politics remains broadly divided between urban and rural Sindh. In rural Sindh, apart from disputes over canals and water resources, there appears to be no issue capable of sustaining political mobilization against either Punjab or the federal government. As a result, water politics has become the principal rallying point for several nationalist parties. At times, this has also led to exaggerated claims or misleading narratives. The political logic is evident: abandoning canal politics would require these parties to confront more entrenched issues within Sindh itself, including feudal dominance, decades of corruption and the continued exploitation of ordinary citizens. The recent trial inauguration of the Jalalpur Canal briefly generated political unrest in Sindh. However, the initial wave of anger faded almost as quickly as it emerged. As videos showing water flowing through the canal circulated on social media, several anti-Punjab groups directed their criticism primarily towards Punjab rather than questioning the Sindh government. Arguably, the first questions should have been asked of the province’s own elected representatives. Why was the public not adequately informed about the project’s legal and administrative status? And why was Sindh unable to pursue its case more effectively through political and institutional channels? The concerns expressed by Sindh are neither new nor insignificant. By the time the Indus reaches the province, river flows have already declined substantially, affecting agriculture, fisheries and the livelihoods of communities living in the lower riparian region. At the same time, the Indus Delta continues to deteriorate while groundwater levels have fallen to alarming levels. Against this backdrop, many in Sindh believe that any additional diversion of water through projects such as the Jalalpur Canal could further reduce the province’s already constrained water availability. Punjab, however, has consistently maintained that the Jalalpur Canal is not among the six canal projects over which Sindh has formally raised objections. It further argues that the Indus River System Authority (IRSA) issued the Water Availability Certificate for the project in 2014, when Sindh was represented on the authority by Mazhar Ali Shah. If Sindh considered the project objectionable, Punjab argues, why were those objections not raised at that stage? Likewise, why was the issue not pursued more effectively when the project was placed before the   Executive Committee of the National Economic Council (ECNEC) for approval and when construction subsequently commenced? Sindh, for its part, maintains that the Provincial Assembly adopted a formal resolution against the canal in 2021. Three years later, in 2024, the provincial government formally placed the matter before the Council of Common Interests (CCI). Punjab nevertheless rejected Sindh’s objections there as well, reiterating that the Jalalpur Canal did not fall within the six disputed canal projects that remain under contention between the two provinces. Politically, however, the episode exposed the Sindh government’s difficult position before its own electorate. The documentary record indicates that the provincial government had registered its reservations through official forums. Yet it failed to convert those institutional objections into an effective political narrative because Punjab’s position appeared stronger from both procedural and technical standpoints. This became particularly evident when Sindh Chief Minister Syed Murad Ali Shah acknowledged during a press conference that the Jalalpur Canal was not among the six canal projects to which Sindh had consistently objected. That admission effectively defused the anti-Punjab momentum that had briefly gathered pace following the canal’s trial inauguration. For years, the Pakistan Peoples Party (PPP) has sought to accommodate Sindh’s nationalist parties within the framework of mainstream politics by assuring them political representation at both the provincial and federal levels. At the same time, nationalist parties themselves appear conscious of the electoral limitations of their own rhetoric. Many recognise that slogans traditionally associated with nationalist politics, including “Pakistan Na Khappay”, may have limited appeal when competing with mainstream political parties in electoral politics.

  • Gujrat: The Height of the Akbari Fort and the Trag…

    When rain descends from the folds of clouds, it assumes the form of divine mercy for the earth—reviving parched soil and spreading smiles across the weary faces of farmers. Yet, when this very rain turns unbridled and the administrative apparatus built to welcome it pulls a heavy shroud of negligence over its eyes, this descent of mercy transforms into a harrowing shape of torment and sudden calamity. Gujrat, a historic and industrial city of Punjab that holds a unique global identity through its civilizational expanse, skilled artisans, and proximity to the Chenab River, presents the terrifying spectacle of a pond and a swamp every monsoon season. Here, urban flooding is no longer merely a climatic accident; rather, it has become a chilling confession of administrative apathy, unscientific planning, and a criminal denial of historical geographical realities. When the hydrological management of cities is evaluated on a global scale, the concepts of “Sponge Cities” are put into practice, but our reality stands in stark opposition. When the state of urban drainage in Gujrat is objectively reviewed through the corridors of history, one’s eyes are opened to the bitter truth that the rulers and elements who dominated this city consciously hollowed out its roots at every level for the gratification of greed. The city’s drainage and sewerage system, in particular, fell prey to the plunder of commission agents belonging to the corruption mafia. It is an immensely agonizing chapter of history that two decades ago, when a renowned international Japanese company completed a detailed survey of Gujrat, officially announced its complete reconstruction on modern lines, and promised a world-class drainage system, the hungry brokers sitting in the echelons of power burnt this magnificent project in the fire of personal lust. The people of Gujrat can never forget the actors who sacrificed the Japanese company’s dream at the altar of kickbacks. Later, when times changed and Chaudhry Pervaiz Elahi assumed the helm of this region as Chief Minister, he released heavy, voluminous funds amounting to billions of rupees to radically improve and modernize Gujrat’s decrepit and worn-out drainage system. Yet the tragedy was that these billions of rupees in Gujrat’s history remained restricted to a few specific and powerful pockets, and to openly divide these funds, the entire system was mortgaged to a fostered contractor mafia. With an exceptionally substandard, superficial, and unprofessional approach, this mafia played a game of window-dressing that instead of fixing Gujrat’s sewerage system, ruined it permanently and turned the entire city into an artificial swamp. Today, the agony of drainage dancing through the city’s streets and roads offers no hope of deliverance from this terrifying urban flood unless a severe accountability of these true, deceitful culprits is carried out. The political leadership that followed also made efforts suited to their respective statures for the betterment of the city; and although their own technical errors consistently hampered this improvement, every resident of Gujrat continues to carry the heavy burden of those primary sinners who devastated Gujrat’s history, civilization, and urbanity. Last year, when urban flooding once again descended upon the city as a mortal torment, uproar echoed everywhere, the wheel of life halted, and the situation reached a point where the Chief Minister of Punjab had to personally make an emergency visit to Gujrat to rescue the district administration from this storm of incompetence. During this visit, a heavy downpour of announcements and promises took place, accompanied by the release of special funds worth billions for complete and sustainable improvement next year. Despite the sincere efforts and financial provisions of Honorable Maryam Nawaz Sharif, the district administration—entrenched in a colonial mindset—spent all its energies throughout the year on personal image-building and photo sessions rather than the timely completion of this vital sewerage project. As ill luck would have it, as soon as the monsoon season arrived once again this year, the colorful balloon of good governance and claims deflated entirely, exposing the bitter reality that this malaise of flawed planning persists and rainwater continues to rain down as a torment upon citizens’ lives. And when this rainwater has already devastated citizens’ lives, wounding their homes and businesses, only then do the traditional efforts of WASA and district institutions begin to bear fruit, with water finally receding from the streets after prolonged suffering. Success drums are then beaten over this very temporary performance, adding salt to the injuries of the citizens. A profound study of Gujrat’s urban geography reveals that its foundations and topography are deeply embedded in its centuries-old historical backdrop. Built during the Mughal era, the Akbari Fort serves as the greatest metaphor for the region’s military, political, and administrative history. Viewed from a geographical and topographical standpoint, the Akbari Fort is situated on a relatively high mound or plateau, and the city’s older structural layout spreads outward from this height in gradual slopes in all directions. Principally and naturally, this elevation of the fort and the surrounding natural slopes should have stood as an exceptional geographical blessing for a drainage system—provided the natural pathways of water flow had been preserved and left unmolested by grotesque tampering. The tragedy, however, is that over time, unbridled urban expansion and a flood of encroachments mutilated this natural sloping system so ruthlessly that today, that very height and slope have turned into a bane for the city. Unchecked commercialization and illegal constructions in and around the Akbari Fort and its adjoining low-lying areas have blocked all traditional water routes in such a manner that water finds no outlet. The consequence is that when rainwater flows down from the elevated parts of the fort, instead of finding an open path or paved drain ahead, it encounters dead alleys, narrow sewage pipelines, and an endless siege of encroachments. Consequently, this water accumulates in lower regions to form a permanent lake, leaving city residents weeping over their helplessness. Gujrat’s tragedy is not merely the accumulation of rainwater; it is a reflection of that collective apathy and corruption which wakes up with the arrival

  • Beyond Riba: Reconstruction of Just Financial Orde…

    The preceding part of this series examined a question ordinarily left outside discussions on riba: who should create money? It argued that commercial-bank money creation is not, by itself, riba, but that the power to create purchasing power through credit is a matter of public importance requiring transparency, restraint and accountability. One possible reform is to separate transaction money, fully backed by sovereign money, from funds deliberately committed for investment. That proposition leads to an even more fundamental question. What exactly is a bank deposit? The answer appears obvious only because modern banking has merged several economically different relationships into the same institution. A person places salary in a current account because it must be available tomorrow morning. Another person places accumulated savings with a bank hoping to earn a return over five years. A business maintains money for payroll and suppliers. An investor deliberately commits capital to a project knowing that commercial gain is accompanied by the possibility of loss. Calling all these balances “deposits” conceals distinctions that become crucial in a financial order seeking to eliminate riba. There is a basic difference between money and investment. Money held for payment performs the functions of medium of exchange and store of nominal value. Its owner expects Rs.100 deposited today to remain Rs.100 tomorrow and to be transferable on demand. Investment capital performs another function. It is consciously placed in productive activity in expectation of gain and consequently bears the possibility of commercial loss. One cannot logically demand both absolute safety and entrepreneurial return from the same contractual relationship unless somebody else is made to carry the risk. Islamic jurisprudence recognised these distinctions long before modern banking. Funds entrusted purely for safekeeping can constitute amanah. A trustee does not own them and is not ordinarily liable for loss occurring without negligence or misconduct. Where fungible money is transferred to another person with authority to use it and an obligation to return its equivalent, the relationship acquires the character of qard, or loan. State Bank of Pakistan’s own glossary reflects precisely this reasoning. It describes an amanah as property held in trust and states that current accounts may initially be regarded as trust deposits. Once a bank obtains authority to use current-account funds in its business, however, the relationship becomes a loan because the bank must repay the full amount. This point deserves much greater attention. If a bank accepts Rs.100,000 from a customer, is free to use that money for its own financing operations and remains legally bound to repay Rs.100,000 whenever demanded, the customer is not bearing an investment risk. Whatever terminology appears on the account-opening form, economically the bank has received financing from the customer. No difficulty necessarily arises if the customer receives nothing beyond repayment of the amount advanced. The difficulty arises when banking system treats this repayable-at-par money simultaneously as the raw material from which additional financing and monetary claims can be generated. Part II suggested one possible solution: transaction accounts should be treated entirely differently. A current account used for wages, household expenditure, business payments and ordinary transfers should represent protected transaction money. If such balances are fully backed by sovereign money or central-bank reserves, they need not be exposed to the bank’s commercial financing decisions. The account holder would possess money, not an investment claim upon the success of a bank. The bank would provide custody, payments, transfers, cards, digital access and settlement services. It could legitimately charge transparent fees for those services. What it would not receive is free investment capital merely because citizens require access to a payment system. The consequences are significant. Fully backed transaction accounts would remain available on demand and at par. They would not earn an investment return because their owners have assumed no investment risk. Nor would their repayment depend upon the quality of the bank’s commercial portfolio. This is not merely a theological distinction. Modern central banking itself recognises the peculiar character of bank deposits. The Bank of England recently described commercial-bank deposits as liabilities used as money, expected to be redeemable at par on demand and relied upon as a safe store of value. It contrasted them with investment products whose values fluctuate and whose losses are borne by investors. A riba-free financial system should take that distinction seriously. The second category would consist of genuine investment accounts. Here the relationship is entirely different. A customer does not merely park money awaiting payment instructions. He consciously makes capital available for investment and accepts that lawful profit cannot be separated completely from commercial risk. Mudarabah provides one classical framework. One party supplies capital and the other enterprise and expertise. Profit is divided according to an agreed ratio; financial loss, in the absence of negligence or breach by the manager, falls upon the provider of capital. SBP itself explains Islamic investment deposits on this basis: the depositor acts as rabb-ul-maal and the bank as mudarib. Restricted mudarabah allows the investor to specify where the funds may be deployed; unrestricted mudarabah gives the bank wider investment authority. The principle is straightforward. If the depositor wants profit because capital is being employed commercially, the depositor must understand what capital is doing and what risk attaches to it. This is where present banking practice requires closer examination. Islamic banks commonly pool deposits, calculate weighted-average yields and distribute profits under elaborate regulatory rules. SBP presently prescribes profit-distribution arrangements for savings depositors, including minimum distribution requirements linked to the weighted-average gross yield of the institution. It also permits additional hiba in specified circumstances. These measures protect customers against inequitable allocation of profits by banks. Their consumer-protection purpose is understandable. At the same time, an increasingly managed and smoothed return can create in the depositor’s mind an expectation remarkably similar to a conventional savings rate. The crucial question is not whether the return happens to fluctuate by a few basis points. It is whether the depositor actually bears the economic character of an investor. An investment account should identify the pool in

Leave a Reply

Your email address will not be published. Required fields are marked *