Lack of fiscal space in Punjab has been a major reason for the continuous deterioration in the quality of public services, disclosed a project review of Asian Development Bank, recently.
Commenting over the "Public Service Delivery Outcomes and Mechanisms", ADB report mentioned that the public services were incapable of coping with the growing population and increasing environmental pressures often characterised by physical inaccessibility, facilities in a poor physical condition, weak institutional management capacity, lack of community involvement, low service standards, lack of attention to gender equity, and poor staff quality.
Human development and the physical infrastructure are marked by a vicious cycle of shortage of funds, resulting in limited spending, service delivery, development, and willingness to pay. Processes and institutional arrangements that are still rooted in the administrative system that preceded Pakistan's independence have resulted in rigid and control-oriented procedures at the provincial level that are inefficient, unsustainable, and unresponsive to the dynamic needs of society.
A serious attempt to reform service delivery structures began with the recent devolution plan, but this needs to be complemented by further measures at the provincial level. A considerable improvement in social sector indicators is needed if Pakistan is to achieve the Millennium Development Goals by 2015.
Commenting over the 'Provincial-Private Sector Relations', ADB stated that there had been numerous policy statements that called for private sector development and the investment regime had been considerably liberalised over the past decade, there was still significant government involvement at the policy and regulatory levels in the provision of infrastructure and economic support services.
Regulatory overlap and inconsistencies remained across federal and provincial governments and institutions, resulting in high compliance costs for businesses. In addition, imperfections in the legal system and in access to justice impeded acquisition and disposition of property and the enforcement of contracts, it added.
Traditionally, the Government favoured supply of cheap, often subsidised, inputs including infrastructure-related services, credit, industrial, and agricultural inputs. The government has also attempted to regulate prices of outputs, in particular for agricultural produce. Government involvement has been mainly through about 130 autonomous bodies and public sector organisations (PSOs) that employed more than 100,000 people.
According to ADB review, the performance of these PSOs was not well documented, but was generally considered to be poor and their accumulated losses were estimated at about Rs35 billion.
There is a realisation that the role of Government needs to shift from providing key services directly to creating an environment that encouraged private initiative and public-private partnerships for the delivery of public goods and services.