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Tuesday March 19, 2024

An equal budget?

By Mushtaq Rajpar
May 26, 2017

The PML-N government is going to present its last budget today. A promising development budget portfolio of over $20 billion was approved at the Ecnec meeting, which was chaired by PM Sharif and attended by four chief ministers. Much of the estimated figures depend on revenue collection targets which we will see when the budget is presented in the National Assembly. However, the high numbers raise several questions.

The development budget figure does not give us its exact breakup. It is the amount solely generated by Pakistan’s own revenue resources, loans from international donor agencies, funding from the US or much talked about CPEC.

It must be noted that today’s budget will be presented without a constitutionally mandatory National Finance Commission (NFC) Award. The ruling PML-N showed little interest in pursuing the NFC, despite successive demands from Sindh. Like the federal government, the other three provinces also showed little interest in seeking the new NFC. Punjab, in particular, does not demand the NFC, fearing it might lose more resources if other provinces collectively press for a more diverse basis for the allocation and distribution of financial resources.

Federal Minister for Planning and Development Ahsan Iqbal should have provided an explanation because educating people about the budget is the responsibility of the government. Members of parliament, the civil society and economists need these numbers in advance to give their analyses of the development budget.

The federal government estimates that its last budget economy will grow by six percent, which is too high a figure based on the performance of the economy during the last four years. The government also pledges to add 1,000MW of electricity to the national grid. Will the government deliver on this promise? It has not done so in the past four years.

The proposed Rs2.1 trillion development budget includes provincial development budgets as well. However, it is a bit early for the provinces to plan and make estimates based on their own resources. In the federation of Pakistan, provinces keep an eye on where and how the federal government is going to spend the over Rs1 trillion budget. As per past practice, smaller provinces like Sindh and Balochistan have complained that the federal development budget is spent unevenly and budget proposals are sought from federally-run departments. The other provinces are unequally represented in these departments and the majority of federal secretaries hail from Punjab who then focus mainly on their own province. It is true that smaller provinces remain under-represented in the federal bureaucratic structure.

The federal government needs to maintain a balance in spending among provinces. For example, there has hardly been a year when the federal government allocated more than 10-15 percent of its huge development spending in Sindh. Sindh often complains that it is ignored in the federal development budget. In the outgoing fiscal year, only a few projects from Sindh were included. Two of them were in Karachi and the NHA’s project -- the Karachi-Hyderabad Super Highway -- benefits the rest of the country too.

With the presentation of its last budget in power, the PML-N government, by the end of FY2017-18, would have spent close to Rs3 trillion on development. It is critically important to see the impact of this massive spending on socio-economic indicators in the country.

Poverty has not been reduced, the literacy ratio remains stagnant and access to basic necessities like water, road connectivity, public health and justice system remains limited. The poor are left at the base of the trickledown effect of economic growth. Job creation and social development have been left to the provinces. One wonders how the federal government justifies its huge spending. It seems that it is obsessed with building a grand infrastructure for would-be investors while the deprived remain unattended. The concept and practice of the economy is alienated from the suffering of common people. Economic justice and equality are not seen as the responsibility of the government in power.

How does one explain the over Rs1 trillion federal development budget to a dispossessed citizen in Thar, Kohistan and Noshki? It seems that budgets have nothing to do with common citizens and work on their own -- much like market forces. Nawaz Sharif and his economic policymakers often talk about ‘Asian Tigers’ and the Chinese experience, but in practice show little regard for state-led development policies.

In the 1970s, Bhutto led a large-scale state-driven industrialisation campaign from Dadu to Thatta. Consequently, industries that used locally produced raw materials were established and various job opportunities also opened for the locals. Nothing of that kind can be witnessed now. One fails to understand what kind of development paradigm the PML-N is following -- the mantra of forex reserves, failed privatisation and showcase projects at the cost of health and education offer us nothing new.

Bridging the inequality gap is a forgotten concern and the party’s politico-economic discourse is for the upper class. Only the elite benefits from their policies. Those who do not have access to education, jobs and credit are dependent on the Benazir Income Support Programme (BISP).

As long as politics remains in the hands of the elite, public policy which caters to powerful businessmen and political lobbies will continue to be devised. The public remains disconnected with public policy and only fights political battles.

Budgets, new governments in power and new economic policies do not give any hope to people that their lives will change. These policies and control over resource allocation only reinforce inequality in our country.

Email: mush.rajpar@gmail.com