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Friday, July 1, 2022
EditorialBudgets of Punjab, Sindh and KP

Budgets of Punjab, Sindh and KP

A cursory look at the budget documents of fiscal year 2022-23 of three provinces shows that the three provincial governments have repeated the finance bills of the previous bills with variation of words and figures. Despite the country on the brink of default, and fuel prices and inflation rate at the highest point of history, the three governments have gone for constituency-level politics by allocating massive development funds and offering tax exemptions to the sectors which have come out of the pandemic impact and have shown huge profits. The budget makers never realised while making the budget that they have entered a year that is different from the pandemic year, and that the country is back to the usual routine. Also, the finance ministers announced massive tax collection targets, without giving a second thought to the fact that the oil market in the world is going through a rough phase and prices have remained above $100 for a second consecutive month. Expensive petrol means expensive electricity and expensive production cost. Tax collections are likely to go down, so will be people’s purchasing power, impacting the production cycles of industries. That means a round of layoff is in the offing and political and economic uncertainties will prevail in the coming months. The only thing which is significant in the three budgets is the introduction of contributory pension in Khyber Pakhtunkhwa for the public servants. Pay and pensions consume 14 per cent to 20 per cent of the provinces’ revenues, while pension has become an unbearable burden on the country. The contributory scheme is an excellent initiative by any provincial government, and in this regard, the government of Khyber Pakhtunkhwa must be appreciated. This policy must be adopted by the federal and all provincial governments. On the other hand, the PPP government in Sindh and PML-N-led coalition government in Punjab have focused on health delivery. The Murad Ali Shah government has allocated huge funds for mega hospitals offering dedicated health facilities to patients free of cost. On the other hand, the Hamza Shehbaz government has announced the provision of free medicines for cancer patients at district and tehsil level hospitals. The question is: both governments have relied on heavy tax collections, which are unlikely to be met. What is their plan B if the governments fall short of tax collections to run the ambitious health programmes?

No doubt, this is the most difficult phase for the people of Pakistan, and for governments, it is the election year, when they come up with extraordinary development projects to win the hearts and minds of the people, of course, votes on the polling day. The best thing the governments can do is to control the leakage of funds and envisage efficient spending of the available funds.

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