EDITORIAL: The Senate Functional Committee on Devolution presided over by Dr Zarqa Suharwardy Taimur expressed scepticism over the claims by the federal government that it has cut down expenditures, adding that if this were so ministries and divisions should have been devolved by now.
While devolution of long-standing ministries/divisions cannot be implemented with a stroke of the pen, though that certainly initiates the process, as staff has to be readjusted, provincial governments have to develop capacity to undertake the new responsibility and, if the proposal is to operate the devolved departments under a private public partnership, then the private partner has to be identified and the actual modalities of the partnership thrashed out that, needless to add, will be under intense scrutiny by a public increasingly challenging the intent behind government decisions.
While the terms of reference of the committee were limited to the decision to devolve ministries taken in 2010, 14 years ago, reflecting the foot-dragging by all three civilian governments since 2008 - Pakistan People’s Party, Pakistan Muslim League-Nawaz and Pakistan Tehreek-e-Insaf - yet one would hope that the focus of the allies and members of the opposition shifts to slashing current expenditure, raised by 21 percent for the current year against the revised estimates of last year.
It is critical that all recipients/major stakeholders of this non-development expenditure voluntarily cut their budgeted allocations.
The single largest budgeted allocation under this head is debt servicing of 8.736 trillion rupees in the current year due to a projected rise in domestic debt servicing of 21 percent as opposed to the revised estimates of last year and, even more disturbingly, a 36 percent rise from what was budgeted last year; this is indicative of heavier than budgeted reliance on domestic borrowing last year - by 12 percent - a highly inflationary policy and it is rooted in a more than budgeted rise in pensions, defence services, and running of civilian government, items that need to be slashed voluntarily in the current year at least that would allow the government to raise expenditure on social sectors, including the Benazir Income Support Programme, to mitigate the impact of administrative measures (raising utility prices and taxes) as well as the domestic and external erosion of the rupee.
It is relevant to note that the government has budgeted a rise to 5142 billion rupees from domestic borrowing this year as opposed to 2860 billion rupees last year.
The basic premise behind this suggestion of voluntary sacrifice of budgeted allocations is the eroding quality of life of the public partly attributable to eroding incomes due to additional tax measures in the finance bill for the current year and partly due to sustained high inflation (due to administrative measures that the government has pledged to the International Monetary Fund that envisage full cost recovery tariffs for utilities).
In the event of a budgeted revenue shortfall the government may resort to additional tax measures including a rise in petroleum levy to the legislated new maximum of 70 rupees per litre (though at the present time the levy is at 60 rupees per litre).
To conclude, it is imperative that the federal government undertakes cost cutting measures publicly for that alone would have an immediate beneficial impact on not only the quality of life of the general public but also ease the country’s jittery markets still unsure about the rollovers by friendly countries for thirty-seven months (IMF programme duration) rather than the previous practice of one year.
Copyright Business Recorder, 2024
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