Pakistan can generate Rs1.2 trillion through alternative resources

Pakistan has the ability to generate Rs1.2 trillion to meet social sector requirements through alternative resources, such as the collection of Zakat, Corporate Social Responsibility (CSR) contributions and religious or religiously motivated initiatives.

ISLAMABAD: Pakistan has the ability to generate Rs1.2 trillion to meet social sector requirements through alternative resources, such as the collection of Zakat, Corporate Social Responsibility (CSR) contributions and religious or religiously motivated initiatives.

Last year, the four provincial Annual Development Plans (ADPs) utilised Rs1.2 trillion, but there are alternative ways to generate resources by ensuring transparency in the use of public money.

On Monday, this was disclosed during a high-level policy discussion titled “Towards Integrated Financing for Pakistan’s Social Sector,” organised by the Sustainable Development Policy Institute (SDPI) in collaboration with UNICEF and Germany’s GIZ.

According to LUMS, it was informed that the people of Pakistan paid Rs620 billion on account of Zakat, but State Bank of Pakistan data showed only Rs11.77 billion.

Minister of State for Finance Bilal Azhar Kayani stated on the occasion that grants obtained by the Centre from the provinces under Article 164 were a temporary arrangement and part of ongoing discussions at the NFC forum. He conceded that funds could be spent more effectively by transferring authority to local levels. He also highlighted the non-establishment of Provincial Finance Commissions (PFCs) and termed it an “incomplete” task.

He mentioned the retailers’ simplified tax schemes, which would bring more than 3.5 million people into the tax net. He said that with the help of localisation, service delivery could be improved at grassroots levels. He also said he had arranged an Open Katchery in his constituency in Jhelum and came to know the realities.

Kayani welcomed the discussion on Zakat, corporate social responsibility and other innovative financing streams. Referring to recent legislation adopted by the National Assembly on Corporate Social Responsibility (CSR), he said companies were being encouraged to increase and transparently report their CSR spending, with compliant firms receiving public recognition. He also called for better coordination between the federal Public Sector Development Programme and provincial Annual Development Plans to prevent duplication. He advocated extending resource-distribution arrangements below the provincial level so that districts and local governments could respond more effectively to grassroots needs.

The event launched the first policy engagement under the Financing the Future initiative, which forms part of UNICEF Pakistan’s broader Public Finance for Children framework.

UNICEF Pakistan Deputy Representative Sharmeela Rasool said the search for additional financing must remain centred on results for children. She said financing mechanisms should be assessed not only by how much money they mobilised, but also by whether they were predictable, equitable, transparent and capable of producing measurable improvements in children’s lives.

Rasool noted that a child born in Pakistan was expected to achieve only around 41 percent of their productive potential by age 18. She stressed that public financing and government leadership must remain at the centre of the agenda.

Advisor to the Finance Minister Adnan Pasha said human development should be treated as critical infrastructure for Pakistan’s economic future, with population growth continuing to increase pressure on public services.

He said private financing could not be treated as a “free lunch” and should generate measurable social and financial returns. He also proposed transparently directing revenues from selected taxes and levies, including those applied to sugary drinks.

SDPI Deputy Executive Director (Research) Dr Sajid Amin Javed said investment in health, children and social protection was an investment in Pakistan’s future. He said Pakistan faced financial challenges due to population growth.

Javed noted that only around Rs12 billion of an estimated Rs620 billion in national Zakat was currently mobilised through formal channels.

UNICEF Pakistan Chief of Social Policy Sadaf Zulfiqar said declining traditional development assistance had increased the importance of corporate and individual philanthropy, public-private partnerships and impact-investment opportunities. Citing a 2023 study, she said annual corporate philanthropy in Pakistan was estimated at around $300 million.

Deputy Executive Director (Policy) Dr Shafqat Munir thanked UNICEF, GIZ and federal and provincial government representatives for supporting the initiative.