Pro-people Punjab?

The Punjab government has not spared any opportunity to emphasise the ‘pro-people’ nature of its Rs5.335 trillion budget. Released on Monday, the provincial budget is reportedly tax-free, with government officials claiming no new tax has been imposed or any pre-existing tax enhanced, and features a record-breaking Rs1,240 billion allocated for development projects. Another Rs2,706.5 billion has been earmarked for non-development expenditures. Punjab has also mirrored Khyber Pakhtunkhwa and Sindh, which released their budgets last week, in hiking the pay and pensions of government employees by 10 per cent and five per cent respectively, and raising the provincial minimum wage from Rs37,000 to Rs40,000 per month. The provincial tax collection target is Rs851.1 billion, with most revenue resources, around Rs4,062 billion, expected to come from the federal divisible pool, emphasising the reliance on the centre to meet provincial goals. While the budget presents a surplus of Rs740 billion, this is subject to the disbursement of the amount the province expects to receive from the FBR, which in turn is subject to the centre meeting its tax collection target. Reliance on the federal government for revenues and the tentative nature of what has been promised have been an underlying theme across the three provincial budgets so far. One hopes things do pan out, especially considering what is at stake for critical fields like health, education and housing.

The Punjab education budget has been set at Rs661 billion, which is almost a quarter of the total non-development expenditure and the development expenditure also includes Rs148 billion for the education sector. The laptop scheme has been continued with the allocation of Rs15.1 billion, under which 112,000 students would get laptops on merit. The health sector will get Rs181 billion from the development outlay and Rs450 billion from non-development expenses and the ‘Apni Chhat Apna Ghar’ programme with an allocation of Rs150 billion under which 50,000 families will get a 15-year loan for building their houses. There has also been some tax relief with sectors including health and education services and construction services exempted from the provincial sales tax on services and a major push towards digital payments. The Punjab government proposed amendments mandating that all service providers must accept digital payments through debit/credit cards, mobile wallets or QR codes.

Laptops, homes, medicines, better hospitals and more digital payments are things Pakistanis across the country desperately need, and it is unfortunate that even after budgets are passed, people must wonder whether all or most of these gains will materialise. In that sense, the Punjab budget, like its counterparts in the other provinces, is not so much a pro-people budget as one that promises to be pro-people. Given how quickly things can change in Pakistan’s fiscal landscape, the gap between the two is not trivial. No one can fault Punjab for not moving in the right direction, but without serious efforts to build up revenue collection capacities at the provincial level, its ability to deliver will remain in question.