In defence of BISP

With the recent steps taken by the government regarding the Benazir Income Support Programme, there are fears that the 120 billion rupees annual allocation is considered an avoidable drain of scarce fiscal resources and that its elimination will serve to reduce the groaning budget deficit.

It has become painfully obvious that the environment within BISP corridors is not positive towards the programme. Questions emanating from the top seem to not be about how to improve the programme, but about what dirt can be dug up. Are more disclosures of ‘scandals’ in the pipeline? There are fears that the objective of defaming the programme – via weekly drip-drip revelations – could be to prepare the ground for its scaling down and eventual abolition.

The irregularities being exposed relate to the targeting of beneficiaries. BISP was launched in 2008, with NADRA-based beneficiary identification; which ensured that families of current and retired government employees, foreign bank account-holders, passport and NICOP holders, etc, would be automatically excluded.

In 2010, BISP changed the beneficiary selection mode – under World Bank advisement – to household surveys. This is where distortions set in. Clearly, the problem lies with the beneficiary identification mode, not with the programme itself.

BISP is hugely beneficial to the economy and recipient households. It is a Rs120 billion annual payout to over five million families to strengthen household purchasing power, which supports millions of small businesses across the country. Recipient households purchase bread, clothing items, shoes, textbooks, stationery, etc, which generates income for local shopkeepers and for businesses up the supply chain.

The sum of incomes is reflected in national income and GDP growth rates. The positive macroeconomic impact of social security and social safety net payouts is well documented in international literature, which shows that cash transfers boost consumer spending and, resultantly, spur investment and employment.

There is empirical evidence as well that the human development indicators for BISP-recipient households have improved relative to others. Two professional studies among them – one conducted by Khan and Qutub, published in 2010 by the Overseas Development Institute in the UK; and the other, in 2014 by Nayab and Farooq published by the Pakistan Institute of Development Economics in Islamabad – have held BISP in a highly positive light. Both these studies studied the programme under the original beneficiary identification mode.

The studies confirm that recipient families exhibited various aspects of economic and financial vulnerability. They tended to be female-headed, had larger household size, had more dependents than earners, had a lower education-level of head of household, had an unemployed head of household, lived in congested housing, and had suffered an unexpected financial shock in the last five years. Rural families tended to be small landholders or tenants and had fewer animals. They also report that BISP had aided economically vulnerable families, helping them address immediate deprivation by meeting daily food and household needs, medical care and education.

Some spot interviews corroborated the above finding. One woman said that her credit line with the local store had been frozen, because of the large amount due; BISP helped reopen her credit line and there is now food in the house. Another said that she was about to ask her daughter to drop out of college because she could not afford the transport cost; BISP helped her daughter to continue in college. And another said that now she can afford to take her blood pressure medicines, while earlier she had to make a choice between her medicine and food for the family.

BISP has also contributed, by default, to women’s empowerment. The first step towards empowerment was that over eight million women were registered with NADRA and obtained CNICs – and were included in electoral rolls. This process proceeded even in conservative constituencies, including (former) Fata, where initial lawmaker resistance was overcome. A very potent case of empowerment was indicated by a woman recipient who responded thus: “Yes, my husband takes away the money as soon as I receive it, but he and everyone knows it comes in my name!”

Under the circumstance, abolition or even scaling down of BISP is certainly likely to cause a dip in purchasing power and dampen growth to that extent. Of course, there will be fiscal savings for the government; but a choice needs to be made between improving the government’s economy or the economy of the people and the country.

The writer was a member of the 7th National Finance Commission.

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