Dr Abid Qaiyum Suleri highlights sectors which deserve
attention in the coming budget The federal budget used to be an extremely
relevant document for the people. Any change in tariffs, oil prices, sugar
prices, etc., were part of the budget and merited a lengthy debate in
parliament. Thanks to the imported economic wisdom, most of such issues are now
beyond the ambit of the budget.
Regulatory authorities such as National Electricity Power Regulation
Authority (Nepra) and the Oil and Gas Regulatory Authority (OGRA) can take care
of power and oil prices increase on a regular basis. Thus, there is a
mini-budget almost every month.
The federal budget (an estimated inflow-outflow statement) is a reflection
of national priorities. If, as a nation, we are concerned about energy crisis,
loss of livelihoods, inflation, poverty and other social issues, then these
issues should get more attention (read allocation) in the forthcoming budget. I
am talking about the Public Sector Development Programme (PSDP) that is being
reduced every year for managing debt repayment and defence expenditure.
In the forthcoming budget, there must be significant allocation for
development to ensure human security which, in turn, is the basis for achieving
national, regional and global securities. The PSDP should also be financed
through internal resource mobilisation and should not be linked with (not to be
materialised, hard to be materialised) foreign assistance.
In order for internal resource mobilisation to occur, tax base needs to be
expanded and the tax to the GDP ratio needs to be improved. Documentation of
the economy is a must for tax base expansion. Systems of regressive taxes need
to be abolished with a significant reduction in indirect taxes which should be
replaced by direct taxes such as wealth tax, tax on agricultural income, urban
real estate and the service sector.
Additional resources provided to provinces under the NFC award would not be
sufficient to smoothly and effectively deal with the subjects which were being
managed by the federal government before the implementation of the 18th
Amendment.
This would require renegotiation of the National Finance Commission (NFC)
Award in the medium run. However, special allocations should be made in the
forthcoming federal budget for provincial governments to take care of (to be)
devolved services, especially health, education, agriculture, population
welfare and environment.
These allocations should be on top of the NFC Award and the provincial PSDP
payments.
Energy sector is another crucial priority that merits attention of our
policy makers. It is a non-traditional security threat affecting not only
people’s livelihoods and day-to-day life but economic growth and potential tax
base as well.
The SDPI reports on performance of alternative energy generation and that of
electricity governance highlight that energy generation and distribution
sectors are not only ignored during federal budgeting, but whatever meagre
allocations are made for these sectors cannot be utilised properly.
One not only needs to increase the allocations for alternative and renewable
energy resources but also for enhancing the capacity of those who would be
entrusted to work on alternative energy projects.
Allocation for mass transit system (underground transport system, trams,
urban railways, etc.) especially in big cities would not only provide relief to
the public but also help in saving petrol, diesel and CNG. The saved fuel in
turn can be used to run industry and generate power. The amount spent on
subsidising fuel during the last three years would have been sufficient enough
to start a decent mass transit system in Karachi.
Finally, let us also talk about defence allocations in the forthcoming
budget. In the aftermath of Abbotabad saga and the recent attack on a Navy base
in Karachi one
must question why a major chunk of tax payers’ money is being spent on our
defence institutions which remain ill-equipped to handle threatening
situations.
We need to focus on strengthening human security, making our people more resilient
and less vulnerable through enhanced social sector spending and cutting the
defence budget. Defence budget should also be presented before parliament for
discussion.
It is a sign of insanity to keep repeating the same mistakes over and over
again, expecting different results. It is high time we, as a nation, redefined
our spending priorities in favour of ordinary citizens. If that is done our
budget formulations would surely yield different results.
The writer is the executive director of Sustainable Development Policy
Institute
URL: http://www.dawn.com/2011/05/29/slashing-a-budget.html
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