111 510 510 libonline@riphah.edu.pk Contact

Big things in ‘small’ packages

Summer in Pakistan brings with it budget season with a total of seven budgets to be presented before parliament and the provincial assemblies for debate and approval. Starting with the federal budget, four provincial budgets and one each for Gilgit-Baltistan (GB) and Azad Jammu and Kashmir (AJK) will be debated, discussed and then finally approved. Yet somehow all the analysis and discussion in the media and other fora is confined to the federal budget.

Our analysts and experts not only have an unhealthy obsession with the federal budget but also display a complete lack of interest in the provincial budgets and those of GB and AJK. The obsession with the federal budget is misplaced because for most people, the budgets that matter and have an impact on the lives of most Pakistanis are local ones.

For decades Pakistan has been going through budget season with a phased exercise that begins with the presentation of the Public Sector Development Programme (PSDP) by the Planning and Development Division to the National Economic Council chaired by the prime minister, followed by the unveiling of the Pakistan Economic Survey of the previous fiscal year by the finance minister. The next day in the annual budget speech the finance minister presents the federal government’s financial plans and proposals for the next fiscal year. The budget exercise is then completed with the federating units presenting their budgets to their respective legislative assemblies.

These events are covered in a big way by the media, being of general interest to the people at large particularly industrialists, agriculturalists, those belonging to the business community and the civil and military institutions. The federal budget has already been presented and discussed ad nauseam. In the days to come budgets will be presented in the provincial assemblies and largely ignored by our otherwise active media.

Our analysts display a complete lack of interest in the provincial budgets and those of GB and AJK. These budgets are the ones that truly matter as they contain most of the allocations for education, health, public transport, small roads, sanitation and shelter as well as the everyday needs of a majority of our people. These budgets also have to deal with issues like inflation, unemployment and even taxation which the provincial governments are responsible for.

After the provinces receive their share, the remainder of federal revenue is spent to service our domestic and foreign debts, to run the government including subsidies, the PSDP and finally security and defence.

After the seventh National Finance Commission Award, the provinces’ share is more than what the federal government retains to meet its obligatory requirements and as such it is left with hardly any fiscal space to bring about any significant improvements to the overall development scenario of the country. Widening of the tax base for instance remains an uphill task for the government’s economic managers as the fiscal space for any new initiative by the federal government simply does not exist.

It was expected that after the 18th Amendment to the Constitution the provinces would take advantage of the enhanced fiscal and administrative space provided to them and take more responsibility for improving the quality of life of the people who live there. In the meanwhile, effective and efficient service delivery remains a distant dream as people are still not clear as to who is responsible for providing them with the basic amenities of life. Most people still expect the federal government to provide them with opportunities to earn their livelihoods despite the fact that now the responsibility for this is more provincial than federal.

The post 18th Amendment federal budget exercise remains the same, however, with no changes made to make it clear to the people that most of their concerns and questions regarding what impact the budget will have on their lives should be put to the provincial capitals and not to Islamabad. If the provincial assemblies are unable to respond to the needs of the people then what was the point in devolving power to the provinces?

Today the federal government has fewer resources as well as less authority in social sectors yet the post-budget analysis remains focused on their role. It is odd that when Pakistan’s progress on the Millennium Development Goals is reviewed as a whole it is not the provinces who are asked to explain why these goals have not been met. The point that the communications strategy of the federal government as well as the post-budget analysis has failed to get across is that if there is rampant inflation, lawlessness or a lack of everyday facilities such as drinking water and sanitary services, it is solely the failure of provincial administrations.

For the first time after the 18th Amendment local bodies elections have been conducted in Balochistan and Khyber Pakhtunkhwa only; it is now imperative that budgetary allocations of these two provinces reflect funds for the local bodies. Only this can ensure development to be people-centric and the fruits of democracy to benefit people at the grass-roots level.

The most used phrase in post-budget analysis is undoubtedly ‘pro-poor’; however this term is more relevant for provincial budgets rather than the federal budget. In order to gauge how the country and its people are faring it is imperative that the budgets of the provinces are scrutinised as minutely as the federal budget. Not only should the provinces be generating their own revenues to undertake projects for the wellbeing of the people but also improving their capacity to implement these projects as well as their election promises.

All seven budgets that are presented annually must be prepared after extensive stakeholder consultations so that the allocations reflect the needs of the people in different sectors and districts. Transparency is required not only in the allocation of funds, but also in their utilisation and in order to measure how much of a difference has been made to the lives of ordinary people. The provincial budgets should be presented with as much fanfare as the federal budget and must be scrutinised more than the federal budget.

The writer is a former cabinet secretary.

Nargis Sethi, "Big things in ‘small’ packages," Dawn. 2015-06-15.
Keywords: Economics , Economic aspects , Economic policy , Economic needs , Economic development , Economic planning , Economic survey , Public health , Fiscal policy , Foreign debts , 18th amendment , Education , Khyber Pakhtunkhwa , Kashmir , Gilgit , Balochistan , PSDP