Punjab budget

The Punjab budget has followed the path of the federal budget. After slashing the federal development budget by around 30 percent, the PTI government has now slashed the Punjab development budget by half. This has left the Annual Development Programme for 2018-19 around 62.51 percent lower than it was in the budget for 2017-18. If there were any doubts about the sheer scale of austerity, this step has removed them. Austerity has hit development spending the most, while the costs of security, debt and keeping the government afloat have not been reduced. Once again, the government has painted a narrative of a crippling fiscal crisis – which it has blamed on the previous government. Punjab Finance Minister Hashim Jawan Bakht has blamed the ‘poor policies’ and ‘financial irregularities’ of the previous government for the current situation.

However, one thing should be clear: such cuts in development spending are unprecedented. The annual development budget approved by the PTI government is even less than the first development budget announced by the Shahbaz Sharif government in 2013-14. On average, the Punjab government increased its development allocation by 15 percent per year during its five-year term. The increase makes sense in line with the devolution of powers and finance after the 18thAmendment and the rules of the NFC award, meaning that provinces now receive more money each year.

The annual development budget of Rs238 billion is so low that it is not worth talking much about its actual components. It is clear that the government has no developmental priorities whatsoever and, instead, is showing international funders that it is following their priorities to the letter. One of the plans that has remained on the cards is a Special Economic Zone in Faisalabad. What is bizarre is that, despite the budget cuts, around 26 foreign-funded programmes remain in the development budget, worth around $1 billion in loans. One would assume that sensible financing would mean these projects would be the first to be slashed, but instead they have been kept on the cards. This sounds like rather whimsical accounting. Surely, one can concur with Chief Minister Usman Buzdar that it took ‘tireless efforts’ to come up with such an unpromising concoction for a revised provincial budget. The people of Punjab have been given the message: keep expectations low. There is little to wonder then about the unsavoury ruckus caused PML-N MPAs in the Punjab Assembly, for which a showcause notices have been given to six opposition MPAs for destroying furniture. Given the austerity in practice, perhaps the money to replace the chairs will not be provided? The fact is that this unprecedented austerity neither bodes well for the development of the province nor for public welfare.