‘Development funds in Punjab are evenly distributed’

LAHORE: Punjab Finance Minister Dr Ayesha Ghous Pasha, in an interview with The News, said non-development expenditure has to be increased to ensure service delivery of completed development projects. Here are excerpts of the interview.

Q. Critics say that Punjab government is not practicing austerity as its non-development expenditure is constantly rising?

A. We have to understand that in order to ensure delivery of services the non-development expenses increase with the completion of each development project. For instance, if Punjab government constructs a school and college building from its development budget it would remain useless unless teaching and administrative staff is appointed. Its maintenance and cost of books to be given free of cost to students will also increase the non-development expenses. Similarly, if a state of art dialysis centre is built from the development fund; it will require appointment of doctors, nurses, and other paramedical staff, besides provisions for procuring dialysis kits. All this is bracketed as non-development expenditure. The recurring yearly cost of running such health units sometimes amounts to 68 percent of the total cost of the project. We are installing hundreds of water purification plants which come under development but the power consumed to pump water, falls under the non-development head.

Can we curtail these expenses? Let me tell you that as you increase development the non-development expenses will also increase, or otherwise there will be no delivery of services, and the development amount will be wasted.

Q. How far is this perception true that Lahore gets a lion’s share from the Punjab development budget?

A. It is not true and I pity those who spread such rumours because they know nothing about budget allocations. Lahore is the capital of Punjab. There are expenses that are done on provincial basis at Lahore and then distributed among the districts on the basis of their population and requirement. For instance, Punjab government has established more schools in southern Punjab then the rest of the province. The budget for constructing these schools was released from the provincial education budget. Though the amount was released from Lahore, the amount was utilised elsewhere. Punjab government is providing stipends to the school going girls in south Punjab from its education budget.

In the same way, the hospitals and health facilities in different districts of Punjab are funded from the annual health development budget and amounts are released from Lahore. Analysts do not factor in these aspects while criticising the Punjab government. We have already posted our medium term budgetary framework for 2014-18 on the web and have not deviated from it. Southern Punjab continues to get higher share in development than its due share according to its population and every penny spent is documented.

I read somewhere that out of total Rs229 billion Punjab development budget, the share of Lahore is 58 percent. Now this is absurd as the size of Punjab’s development budget is Rs550 billion. The analyst exaggerated the allocated amount of the development fund for Lahore and halved the actual development outlay. Many projects meant to be constructed all over Punjab are first launched in Lahore. Lahore Metro is one example which was then completed in Rawalpindi and now is under completion in Multan and Faisalabad. Also, many health facilities established in Lahore cater to the needs of people of all districts. Another point that should be kept in mind is that Lahore accounts for over 10 percent of the population of the entire province. The safe city project will be launched in Lahore and then in 5 more cities within this fiscal.

Q. Provinces depend highly on federal transfer; why is Sindh ahead of Punjab in provincial tax collection?

A. We have set up a transparent tax collecting apparatus much better than FBR. The difference between Sindh and Punjab is that we have to make efforts to collect provincial taxes while Sindh collects most of its taxes at the import stage that are reimbursed in its accounts by the federal government. Punjab has negative tax collection in telecommunication because the telecom companies are recovering investments they made in purchase of 3G and 4G licences.