Public good or appeasement?

LAHORE: Provinces use substantial federal transfers for public good, but these funds are often a mix of genuine initiatives and politically motivated spending. Enhancing tax collection and ensuring transparent use of funds could enable provinces to offer more relief and services to their citizens.

Understanding how each province in Pakistan allocates funds from federal transfers and provincial revenues is crucial to evaluating whether these funds are being used for authentic public welfare or merely for political appeasement.

Starting with Punjab, genuine public good is evident in the allocation of significant funds to healthcare, including initiatives to improve hospital access, establish health insurance schemes, and provide essential medical services. The province has also invested in upgrading schools, building new educational institutions, and implementing programs like the Punjab Education Foundation to support low-income students.

Punjab has been proactive in infrastructure development, including road networks, public transportation (such as the Lahore Metro), and urban development projects. Punjab has also provided relief to its electricity consumers, demonstrating its ability to support citizens beyond basic federal transfers.

However, in terms of public appeasement, the Punjab government frequently provides subsidies on food items, public transport, and other essential services. While these measures are beneficial, they are sometimes criticized for being politically motivated instead of being economically sustainable.

In Sindh, investments have been made to improve water supply and sanitation services, particularly in urban areas like Karachi, though challenges persist. The province has also expanded its healthcare network, focusing on maternal and child health, although service quality varies.

Programmes such as the Benazir Income Support Programme (BISP) are significant in Sindh, offering financial aid to low-income families.On the public appeasement front, Sindh has faced criticism for funding projects perceived as politically motivated, such as the construction of grandiose public buildings or unnecessary road projects in certain constituencies.

Khyber Pakhtunkhwa (KP) has made notable progress in education, including increasing the literacy rate and upgrading school infrastructure. The Sehat Insaf Card, a health insurance scheme, is a significant public good initiative in KP, providing free healthcare to millions. KP has also invested in tourism to boost economic development, improving infrastructure in scenic areas like Swat and Chitral.

However, populist measures in KP, such as food subsidies or cash handouts, especially during election cycles, are criticized as being aimed more at winning votes than at fostering sustainable development.

Balochistan has focused on developing basic infrastructure, including roads, electricity, and water supply in rural areas, which contributes to genuine public good, though progress is slow. There have also been efforts to improve health and education services, though these are often hindered by logistical and security challenges.

Regarding public appeasement, Balochistan frequently faces accusations of funds being diverted for political patronage, with resources used to appease tribal leaders and local power brokers rather than for widespread public welfare.

Overall, provinces, particularly Punjab, have demonstrated their ability to provide relief measures, such as electricity subsidies. However, the extent to which they can offer these measures broadly depends on their revenue generation, especially from underutilized provincial taxes like property tax and sales tax on services.

If provinces enhance their tax collection, particularly in areas like property tax and services tax (including from professionals such as doctors and engineers), they could significantly increase their revenue base, allowing them to provide more public goods and relief measures.

Ensuring that funds are used transparently and for public good, instead of political gain, is essential. Strengthening institutions like the Provincial Finance Commission (PFC) can aid in this effort.