BUDGET 2009-10 Brief Review: Desperate Voice of a Patriotic Pakistani
Though it’s very late to comment on the budget when the books are already written on it. I was surprised to see the budget figures and more surprised when I listen to the budget speech that there’s nothing in the budget except for some general figures and salary increase. Though our ranking have been improved from No. 9 to No. 10 in the Failed State Index but it is one of the biggest issue we need to address.
With a negative per capita growth (Dr Nadeem stated in his article in the Daily Times) we might have announced some policies for the manufacturers which help them investing in the country for the long run. There was no as such significant electricity policy was announced which can boost the confidence of investors. Instead after every weak a minister come on TV and said that the load shedding will be finished by the end of this year and there will be cut down on the load shedding in this month etc.
I was surprised not to see any inflation cut policy in the budget, unless IMF asked them to restrict their money supply at 10 percent for the next ten years. However, it would be a stabilization policy but we also need higher growth rate in the long run with lower inflation.
Money for the development projects mainly go into the projects of big cities. It was surprising to see that out of 150 billion PSDP budget for Punjab Assembly, 30 Billion will be spent on Lahore ring road only.
Industrial Clusters which is one of the important things to do was again neglected in the budget. Sahiwal and Sargodha are two examples of Dairy Clusters which we can build and people of that area will get employment in their own area. Moreover, it’s time to build more cities than having only five major cities. If we develop Sahiwal and Sargodha (for example) as the major cities of Pakistan the urbanization will grow. Urbanization will lead to more investment through development of infrastructure and communication systems. This will attract businesses to procure land in the developing area and set-up factories and offices. Employment will be increased when more businesses are established, which increase the quality of living standard.
Tax reforms are being done for the past several years. Due to those reforms direct tax share has increased and custom and excise duties are replaced by sales tax. But overall tax to GDP ratio has declined in the last decade. However, nothing was mentioned about the reforms in the budget. Now we really need to do four things at least; (1) try to increase the base (I know it’s a very general term), (2) Reduce corruption which affects our overall revenues (3) Introduce new taxes which do not harm middle class people and economic growth in the long run and (4) some reforms are also needed for the transparency of income tax returns.
The industrial policy should not be supply driven but we need to look into the demand side as well. Though investors and industrialists always ask for relief (tax cuts, subsidy etc) but there will be some other measures as well which they will ask. For Example, industrialists always complain the policy of exports such as lack of information sharing at every stage. Even the established industrialists complain about the non-availability of freight charges. In this era of IT it is very easy to put all these things online and update daily in the morning.
Terrorism is one the biggest issue Pakistan is facing. Army operation and having 2.5 million IDPs and then spending Rs. 50 billion is not the solution. There are few people who likes Taliban because if they have some issue to resolve they go to Taliban and get it resolved in days, thus they do not have to wait for years in courts. The unemployed people who do not have education praise/like Taliban who give them protection, employment, money and education. Patriotism is secondary thing if the country is not doing significant for the people of the country.
Now I would write something about the five major issues of Pakistan and I guess if we address them parallel to the other issues and try to solve it ASAP that would be the greatest thing for the people of Pakistan.
1. Property rights: It is such a big issue for the last 62 years and it is neglected as it is not present. Benami transactions, file transfers, not recording/registering the title of the land are the problem which should be addressed to reduce the transaction cost, corruption and fights on the properties.
2. Judicial System: We’ve such a great corrupt legal system that even a Stamp Paper vendor asked for bribe is someone goes to him for a stamp paper. For getting a stamp paper worth Rs. 10 sometimes we need to give him Rs.50 and even more depending on the worth of the person. Oath Commissioner sitting in the “Kutchery” of Islamabad asked for at least Rs.100 if someone needs him to sign a simple paper. Reader asks for money to put the file in line. Moreover, most of the people do not know when their case will be listened by the judge and they daily come to the courts in the morning and leave without anything in the evening. It is the worst place for poor people who come from the villages to those courts. It is very easy to send a letter at least two weeks earlier (so that there is no problem of delayed post) that your case will heard by the judge on this date at this time. Moreover, give a specific time for each case.
3. Clean drinking water: The 2nd necessity for life after air is not available in most of the rural areas of Pakistan. Even in Islamabad people use filter to filter the water before drinking it. The feasibility study was conducted in the Planning and development Division on the Filtration plants in each district and they setup in Islamabad as an experimental basis but no idea what happened after that. MNA, MPA and 13 Union Council representatives in each union council who were voted by the people of their area can do this simple task for their own people.
4. Health: Health sector needs special attention. Corruption is everywhere but this sector needs attention beyond corruption thing. As far as my little knowledge is concerned, we need more BHUs and District hospitals. Moreover, before that we need more doctors there, more nurses, more ambulances plus these should be present at all the times. It would be good if Doctors should get more pay than any ordinary government servant, which will be a good incentive to work. There is a special pay scale for the Atomic Energy people and we can introduce very special scale for the doctors as well. The more important thing is to give subsidy for health expenditures who cannot afford. To do this we need to adopt strict documentation procedure which can be done through either issuing social security number which has all the information of taxes, income from different sources, phone bill, electricity bill, credit cards, etc. Through this card it would be easier to identify the needy person.
5. Education: I guess we cannot do anything about this sector. The problem is very chronic. Teachers in the middle and high schools are in habit of giving sample test papers so that their students can pass. “Rattalization” policy is very efficient and effective in the middle and high schools. Free education for everyone till 10th grade or intermediate along with better facilities in school, low teacher student ratio, better pay to the teachers is one way to improve education system. Examination system should be changed from “rattalisation” to conceptualize the issue.
I guess it is a time to invest in these social issues and it is time that investors, intellectuals, policymakers, think tanks sit together and make a sound policy. I wish everyone best of Luck