The current practice of unbridled discretionary allocations and spending will only widen the crevasse between haves and have-nots
The thick budget documents often go untouched by most of the parliamentarians on either side of the aisles. Ritualistic narratives and perfunctory comments are liberally exchanged often without trying to decipher the complex digits cooked up by seasoned bureaucrats. Almost every year certain customary phrases are used e.g. tax free budget, pro-people budget, pro-poor budget and anti-people budget.
Media avidly covers all the contentious comments and cacophony unleashed during the post-budget discussions. The post-budget debates also digress from the budgetary substance and hover around irrelevant issues. It makes life much easier for the government as the real issues get obscured and the budget often sails through without any significant amendments.
A deeper scrutiny of the documents of the Federal Budget 2017-18 reveals some startling figures that did not attract adequate attention and discussions. The federal Public Sector Development Programme (PSDP) of one trillion rupees includes colossal allocations on discretion of the prime minister. Some of these lumped allocations include the prime minister’s global SDGs achievement programme (Rs30 billion), special federal development programme (Rs40 billion), energy for all (Rs12.5 billion), clean drinking water for all (Rs12.5 billion), special provision for completion of CPEC projects (Rs5 billion), prime minister’s initiative (Rs20 billion), gas infrastructure development cess (Rs25 billion) and prime minister’s health initiative (Rs18 billion).
The PSDP document does not unpack any details of the schemes against these allocations. Hence, the prime minister has been authorised to use this money on his whims. Ironically some of these budget heads also had allocations in the outgoing year and some of them actually exceeded their originally earmarked amount. This becomes even more objectionable in the last year of the government’s tenure. The money can potentially be diverted to preferred electoral constituencies to woo voters.
Not just the federal government, but some of the provinces also have similar tendencies. Sindh had been earmarking huge allocations under the head of block allocation and special packages for politically favoured districts. Loyal bureaucracy has mastered the art of inventing such novel ideas to reciprocate blessings of political leaders. There is a little realisation that discretionary allocations are in fact discriminatory in essence. Political leaders freely use such untied money to make generous announcements in political rallies to lure masses. These announcements are normally followed by congratulatory advertisement draining additional resources from a frail public purse.
Public sector development’s cycle has three important ingredients i.e. research, planning and development. Research provides vital data on development deficit in various sectors and geographic units. Planners are supposed to analyse and use the data to set priorities of the national development. One important role of the state is to ensure development equilibrium across various sections of society. This becomes even more pivotal in a federation where certain areas and segments of the society have a chronic deficit of human development. One important job of the development planners is to ensure that resources are judiciously allocated and utilised to bridge such gaps. If such gaps are not plugged, they can lead to explosive socio-political repercussions.
In Pakistan, federal and provincial Bureaus of Statistics are mandated to collect, compile and analyse data through a variety of reports. The Planning Commission at federal level and the Planning and Development Departments in provinces are the key clients of this information to design annual development plans. Development schemes and their allocation should ideally be based on the development statistics.
Unfortunately, this cycle has been completely distorted due to misplaced political priorities. Discretionary and unidentified schemes with massive allocations of billions of rupees are sheer violation of development principles and ethos of a federation. Development projects are nothing but a return to the citizens of the taxes that they pay on daily basis. A scientifically defined development cycle should determine the development priorities rather than letting political agenda of the ruling elite to dictate how the money will be spent.
Pakistan has a mind-boggling development gap. Every year the country appears on lower rungs of the human development index. On the key indicators of human development, Pakistan is trailing behind several countries in the region. Multidimensional poverty and a draconian inequality are two nerve wrenching challenges being faced by the country.
A UNDP’s report titled, ‘Development Advocate Pakistan’ disclosed that inequality has grown even though consumption based poverty has dropped from 57.9 to 29.5 per cent between 1998-99 and 2013-14. The Gini coefficient, which measures income inequality, was 0.35 and this number has risen to 0.41 in 2013-14. Oxfam’s report ‘Multiple Inequalities and Policies to Mitigate Inequality Traps in Pakistan’ revealed that the consumption share of richest 20 per cent has been more than five times larger than the share of poorest 20 per cent in both 1990-91 and 2011-12. According to the report the Gini index is highest in Sindh, followed by Punjab, while Khyber Pakhtunkhwa (KP) and Balochistan provinces have the lowest levels of inequality.
Only last year United Nations Development Programme (UNDP) and Oxford Poverty and Human Development Initiative (OPHI) released a report "Multidimensional Poverty in Pakistan" that unmasked some shocking facts of the multi-dimensional poverty in the country. Rural areas of Sindh and Balochistan depicted 75.5 per cent and 84.6 per cent population trapped in the multi-dimensional poverty. Scale of multi-dimensional poverty in the rural areas of Punjab was not pardonable either as approximately 44 per cent population was found enduring multi-dimensional poverty.
This disproportionately higher prevalence of poverty in rural areas is a consequence of decades-long skewed development priorities. As against income poverty, multi-dimensional poverty captures a wider spectrum of human development. This explains the nail-biting equation of rising average incomes juxtaposed with spiraling multi-dimensional poverty. Normal algebra fails to explain this abnormal correlation which is mainly due to discriminatory development paradigm in vogue for decades and seems to continue unbridled.
The aforementioned UNDP’s report alleges that to date Pakistan’s response to inequality has been superficial and focuses on symptoms rather than root causes. As a result, inequality has persisted and grown. It recommends that to tackle inequality, key institutions need to be reformed and fiscal, monetary and other policies should be made equitable.
Public policy ought to contemplate more strategically directed financial focus while assigning astronomical funds under the public sector development programme. Public sector development programme is not just a mishmash of disjointed schemes. It rather has to follow well-meditated developmental goals targeting greater social equilibrium leading to social harmony and political stability.
The current practice of unbridled discretionary allocations and spending will only widen the crevasse between haves and have-nots. It will also have political repercussions as much of this money is likely to be funneled in favourite pockets of the current government. Since the current regime predominantly comes from one province, its detractors will have every reason to question the parochial provincial tilt of the government. Such reckless treatment of development resources may bring short term political gains for the people in power but the long term ramifications would be perilous.