Current vs development expenditure

Published on 12th May, Edition 19, 2014

 

If one looks at the composition of annual budget, one point is very clear that revenue collection is barely enough to meet the current expenditure. Often, amounts are borrowed to meet the shortfall and almost the entire developmental expenditures are financed through aid, grants and softer loans acquired from multilateral financial institutions.

The budget for next financial year is not likely to be very different from the previous budgets. Many analysts fear that the incumbent may indulge in programs that can help in attaining political mileage. The focus may also remain on Punjab, the vote bank of PML-N. They also go to the extent of saying that Sindh Government is not likely to come up with major developmental projects. They also say that even the ongoing projects are being delayed sue to the apathy of the rulers. It is not only Karachi that is being completely overlooked, but other major cities of Sindh, including Benazirabad (formerly Nawabshah) face the worst.

To begin with a lot of development work was done in Karachi during Pervez Musharraf’s regime, when Mustafa Kamal was Nazim for four years. Since the departure of the two the city gives the filthiest look. One wonders where the mechanical brooms and janitorial staff has gone. One could see heaps of trash even on main roads, including the posh shopping area on Tariq Road. It looks as if I. I. Chundrigar and M. A. Jinnah roads have not been cleaned for ages. Cognizant of the situation, Governor, State Bank of Pakistan has to initiate ‘Clean Chundrigar Road’ campaign with the help of a few commercial banks. However, it seems that those who are assigned the responsibility have also vanished.

Karachi is a city that houses around 20 million people and needs minimum Rs100 billion annually for maintaining its infrastructure in upright condition as well as construction of new facilities, i.e. roads, flyovers and underpasses, supply of fresh water and disposal of sewerage water, street lights and green belts, plantation and gardens. With the construction of high rise buildings, new water supply and sewerage lines have to be constructed on ongoing. Added to this is ensuring the availability of an efficient, comfortable and affordable public transport system. Various efforts by the government to manage public transport in the public sector have failed. May be the time has come to assign this responsibility to the private sector. Lately, too many rickshaws have come on roads. Though, these have broken the monopoly of ‘transport mafia’ the city certainly needs an efficient public transport, consisting of long chassis vehicles with air-conditioning facility. At an average a student, executives, and workers have to travel 20 to 30 kilometers to reach office. Commuting in the evening becomes a real headache because the time consumed is around 90 minutes as against half an hours spent in the mornings.

 

Due to inefficient public transport and extreme traffic jams in the evenings not only commuting takes more time, but billions of dollars of fuel burnt unnecessarily. Therefore, more roads, flyovers and underpasses have to be constructed. Though Sharae Faisal has been declared ‘signal free corridor’, it still suffers from worst traffic jams during peak hours. One of the reasons for traffic jams is parking on the roads, to overcome this parking plazas have to be constructed in main shopping areas. To undertake all these developmental activities more funds have to be allocated for Karachi. It is necessary to remind the provincial government that if the entire amount collected under ‘vehicle tax’ from Karachi is spent on the city, the most efficient link roads, bypasses, underpasses and flyovers can be constructed. It may also be not out of content that Lyari express is still incomplete. The remaining portions must be completed on war footings as it will reduce the traffic on the main arteries of the city.

Besides an efficient public transport the city needs more hospitals and schools. Though, the private sector is playing an important role, the government should allocate more plots for these purposes. However, it is also to remind that private hospitals and schools should develop their code of conduct and follow it in letter and spirit. Lack of regulatory system often paves way for fleecing the parents as well as the teaching staff. One fails to understand that most of the private schools, colleges and some of the universities are doing a thriving business of ‘Marriage Gardens/Halls’ and earn millions of rupees but still charge fabulous fees from the students.

ICT has become an integral part of the life of almost every citizen, irrespective of age and income group. However, cellular phone industry has become the biggest source of revenue collection for the government. Now PTCL and all the cellular companies are working in the private sector. They spend billions of dollars on the construction of infrastructure, but the government very ruthlessly charges over 26 percent tax on post paid bills and pre-paid cards. This is outright fleecing the customers. It may also be kept in mind that cellular companies pay millions of rupees taxes as import duty and income tax and provide employment to million of people directly and indirectly.

Since cellular companies are proving the backbone for branchless banking, the GoP must bring down the tax rate applicable on cellular phones. As such this infrastructure has not been created by the GoP, therefore it has no right to collect any tax. The cellular companies have invested millions of dollars, created employment for highly skilled people as well as those involved in ‘easy load’ business.