Three provincial chief ministers from three competing political parties – Punjab (PML-N), Sindh (PPP) and Khyber Pakhtunkhwa (PTI) — are vying with each other to deliver more to their people within their significant financial constraints exacerbated by the unrealistic target set by the federal government with approval from the International Monetary Fund (IMF) of 1217 billion-rupee provincial surplus for the current year against 539 billion rupees realised (126 percent of this year’s target) and 600 billion rupees budgeted last year (103 percent of this year’s target).
A major objective of all the three political parties leading the three provincial administrations (in power since 2008) is to definitively change the electoral/voting dynamics from what is generally perceived to be the actual results of the 8 February 2024 elections.
This overarching objective is of the greatest relevance to the PML-N Punjab government (relative to Sindh and to a lesser extent KPK) as it faces an existential threat in the province based reportedly on its continuing plummeting popularity.
At the same time with a PML-N led government in the Centre Punjab is more constrained to implement the IMF package relative to Sindh and KPK – a factor which explains why during the 11 to 15 November IMF mission’s visit the province altered its 140 billion deficit to 40 billion-rupees surplus.
In these extremely financially challenging times for the party leader to appoint his daughter, a novice in the field of administration (though invariably shadowed by a long-term loyalist Pervaiz Rashid selected by the party Supremo to serve as Senator in March 2024), is perhaps a gamble that indicates his overarching priority.
To date the way forward adopted by all the three parties governing the three provinces has been to follow policies that were in force during their previous tenures, notably to extend freebies (laptops/transport) and subsidize housing/transport/credit to the disadvantaged though not through the Benazir Income Support Programme (BISP) whose beneficiaries are scientifically identified and hence recommended as the ideal route for channelling the taxpayers’ money by donor agencies.
The Chief Minister Punjab announced a 400 billion-rupee subsidy package and one measure had the party at the federal level scrambling to defend her decision as it was a violation of the agreement with the IMF: 14 rupees per unit of electricity subsidy for all those consuming between 201 and 500 units of electricity for August and September — a consumer base that does not comprise of the poor and vulnerable but lower and middle income earners — at a cost of an unbudgeted 45 billion rupees.
The party narrative: her heart was in the right place as her intent was to provide relief to the public while the impact on the budget deficit with its cascading impact on inflation was ignored. No other province followed suit, even though this measure was targeted to strengthen her political base.
Maryam Nawaz also launched the Clinic on Wheels Project, envisaging 200 clinics to serve 4 million people. While inaugurating the project, she said that these clinics will be deployed in heavily populated areas where residents face challenges in accessing health care – a project that can be unreservedly supported.
This is not a new initiative as in 2010 the then Chief Minister, her uncle Shahbaz Sharif, set up health mobile units targeted to provide diagnostic and treatment facilities to people in under-developed districts however she intends to considerably expand the reach.
She is also focused on establishing disease specific hospitals, including for cancer and cardiac illnesses, as per the policy thrust of the Sharif family, the PPP and the PTI. Sindh government has budgeted funds for thalassemia and dialysis patients. KPK has budgeted 34 billion rupees for Sehat Card, which allows impressive coverage to all provincial citizens to in-hospital care in designated hospitals.
The three provinces have announced the following somewhat similar schemes: (i) Punjab Kissan card for provision of subsidised inputs to farmers, with loans of 150 billion rupees — 30,000 rupees per acre — to be provided to 750,000 small farmers on easy terms – a facility which in the past was hijacked by the rich and a livestock card envisaging 2.5 lakh-rupee interest free loans for animal feed; Sindh has announced a senior citizen card, a Benazir Mazdoor card and interest-free loans under Benazir hari card for the poorest growers who are dependent on aarthis for purchasing inputs.
However, the funding mechanism for loans is not specified — through the provincial treasury or to arm twist private banks (or the provincial government owned banks) to deliver on the pledge, a policy violative of the agreement reached with the IMF, or, as happened in the past, banks will drag their feet to render this measure unsuccessful; (iii) free laptop schemes initiated by Shehbaz Sharif; (iv) Punjab honhaar scholarship programme to promote education envisaging 30,000 rupees annually to students across 68 districts covering government and private universities, 12 medical and dental colleges and 359 colleges – a scheme that must be supported and is in line with the pledge to the IMF under the ongoing programme that the government will increase non-BISP outlay on education and health; Sindh acknowledges the government’s responsibility to provide free education to between 5 and 16-year-olds, and carried out a survey which revealed that 10 percent of students enrolled in private schools are on scholarship.
KPK government has also acknowledged the right to free and compulsory education with the Chief Minister Education Endowment Fund that supports students on merit and affordability; and (iv) subsidised bus travel in several Punjab cities including Lahore, BRT in Peshawar and free bus routes in Karachi. Sindh also plans a free bus transport on three strategic routes, notably Surjani to Tower, Orangi Iqbal market to Tower in Karachi.
There is also unanimity amongst the three provincial governments that solar energy must be supported. Punjab intends to provide free solar modules to households consuming less than 200 units of electricity, and for those consuming between 200 and 500 units the government will cover 90 percent of the cost.
Sindh too has decided to provide interest-free loans to the middle class for installing solar systems while KPK has subsumed distribution of two kilowatt free solar systems amongst deserving families under the party’s signature ehsaas (BISP) programme inclusive of solar panels, inverters, wiring, fans and bulbs (which must be supported as it makes it a targeted programme given that BISP beneficiaries have been appropriately identified).
Power is a federal subject and one would have hoped that the Chief Ministers would have called for a Council of Common Interest meeting where a comprehensive policy would be thrashed out, given that today (i) there is excess capacity, and (ii) the rising number of solar units have reduced demand from the national grid, thereby leading to a rise in tariffs of existing consumers of the national grid as capacity payments rise.
To conclude, the CCI needs to be called to reach a consensus on matters relating to socio-economic uplift schemes, given the continuing fragility of the economy makes stand-alone largesse for any one sector or income group within a province at the taxpayers’ expense fraught with negative macroeconomic consequences.
The last CCI meeting was called on 29 January 2024 bafflingly during the caretaker setup, in spite of the fact that the Eighteenth Constitutional Amendment makes it mandatory for the Council to meet once every ninety days with the last annual report uploaded by the CCI dated 2020-21.
Copyright Business Recorder, 2024
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