Daily Times

Unlike the federal government which is on an austerity drive, the government of Punjab has chosen to increase its expenditure by 3 percent in the fiscal year 2019-20 over the previous year. Its Rs 2.30 trillion budget promises a significant increase in development spending, indicative of growing pressure on the government from the MPAs to initiate development projects, which were refused funds in the outgoing year due to cash shortage. The whopping 47 percent increase in the development outlay might also be seen as aiming at winning the forthcoming local government elections in the province.

There is, however, no effort to win the hearts of the salaried class as a meager 5 to 10 percent raise has been announced. The benefit of the raise is likely to be lost in most cases to the revised tariffs and slabs of income tax and a bevy of new taxes. There is a significant increase in professional tax and agriculture tax. Taxes collected from doctors, hakeems, builders, jewellers and other services providers will all be likely passed on to the public. The government does not appear to have taken any measure to ensure that service providers do not get to pass the burden on to their clientele.

The cash-strapped government has also initiated 71 projects under the private-public partnership. The mode of finance has its advantages as well as disadvantages. One will have to wait until next year to assess the success of these projects. Community watchdogs need to watch out the terms of reference under the PPP projects. Apart from new taxes, the government is eyeing its Rs 1.6 trillion share in the divisible pool of federal taxes and Rs 249.9 billion from a year ago.

While the finance minister announced structural reforms for better service delivery, the government is going for popular methods of dishing out cash under its Rs 9.8 billion Punjab Ehsaas Programme. The programme, which will run parallel to the Benazir Income Support Programme, will provide cash support to the elderly, the disabled, orphans, widows, transgenders and government employees who lost their lives in terrorist attacks. The situation underscores the need for the devolution of the Benazir Income Support Programme so that the provinces incorporate their social welfare projects under the successful and tested programme instead of launching new ones.

A 37 per cent allocation of funds for south Punjab areas is a significant re-distribution effort. While this might not compensate for a new south Punjab province, it might help improve the development standards. The people will have to guard the allocation. In the past, allocations announced in budget speeches have ended up being re-allocated during the year. *