| June 26, 2002 | Wednesday | Rabi-us-Sani 14, 1423 |
Please Visit our Sponsor (Ads open in separate window)
Biased & short-sighted
THE Punjab budget for 2002-2003, presented by the provincial finance minister in Lahore on Monday, having a record outlay of Rs 130.7 billion, aims at strengthening business confidence and promoting development and economic growth. Although showing a big surplus of over Rs 13 billion, it scarcely provides any relief to the common people groaning under an unchecked price hike, including the high rate of an across-the- board GST and recurrent increases in the cost of utilities. While no new tax has been imposed, the rates of some levies have been revised upwards and the scope of professional tax widened to include lawyers, jewellers, departmental stores, electronic goods, cable operators and stock exchange members. Together with motor vehicles, which are the main target of the tax changes, the impact of these measures will be quickly passed on to the people, escalating the vicious circle of dearness all around. The slight raise in the exemption limit on property of widows and disabled is small comfort. Scant effort has been made to tap the potential of the agriculture sector taxes, apparently in expedient deference to the clout of the powerful farming lobby which has stoutly resisted efforts to tax agricultural income. Revenue generation should have been a key concern in view of the increased dependence on federal transfers. From the divisible pool the province will get Rs 85.2 billion against the revised estimates of Rs 82 billion and budgetary estimates of Rs 91 billion for the outgoing year. Other federal transfers are estimated at Rs 5.552 billion and provincial tax receipts and property and enterprises are estimated at Rs 12 billion and one billion rupees, respectively.
However, the benefit of it is considerably neutralized by the jump in the non-development expenditure which has gone up from Rs 101 billion to Rs 117 billion. The rise has been attributed to the revision in pay and pensions, but there is also no noticeable effort to cut down on waste and unnecessary expenditure and reduce perks and privileges and monetize some facilities, especially when only debt-servicing, amounting to Rs 25 billion, takes away a major chunk of the budget. Nevertheless, some right noises have been made against the neglect of the social sectors, especially health and education, the allocations for which have been increased substantially. But higher allocations alone cannot deliver unless proper utilization is ensured.
A record allocation of Rs 12 billion made for law and order is driven by investment concerns and business friendly objectives. Of a piece with this policy is to advance soft loans of Rs 1,200 million for small industries and a self-assessment scheme for social security from next year. Up to 16,000 job opportunities are expected to be created during the first phase of the scheme. Companies and individuals paying the professional tax would pay it at the same rate next year and no government official would be able to inspect their premises. Inspection of electrical installations is being entrusted to experts and engineers from the private sector. Training facilities are being improved and export processing zones in major industrial centres are on the anvil.
However, greater attention should have been paid to the agricultural sector in view of the province’s agrarian economy. An amount of Rs 656 million will be spent on 40 farming development schemes during the next financial year, aimed at improving per acre yield and achieving food security and reducing edible oil imports. An amount of Rs 2.31 billion will come from the federal government to mitigate the impact of the drought. Improving irrigation is a pertinent objective, though in view of high input costs, relief should have been given to the farmers along with steps to improve the infrastructure for production and marketing of crops to meet the WTO challenge.
The share of the Annual Development Programme for the next year is Rs 20.750 billion. The province’s funding of its development budget includes Rs 7.385 billion which will come in the shape of foreign assistance and loans, indicating that the potential to raise more resources for its uplift is not being explored, and for a province of Punjab’s size and population, a higher allocation for uplift is called for in any case. An important feature of the budget is the sum of Rs 58 billion envisaged for the local governments, the district share forming 38 per cent of the total resource allocation. It is in line with the fiscal devolution which effectively leaves allocations of funds under different heads to local governments to manage their affairs. However, without better supervision, improved tax collection and management of funds by the provincial government, coupled with relief to the common man, the task of development and growth cannot go very far.
WITHOUT attempting to maintain even a semblance of balance between the two warring sides in the Middle East conflict, US President George Bush outlined his long-awaited vision for peace in the region on Monday by launching a blistering attack on the Palestinian leadership. The gist of the message was clear: Yasser Arafat was the main obstacle to peace in the region and the Palestinian people must get rid of him and throw up a new leadership if they want to see the creation of a provisional state of their own. He asked the Palestinian people to “embrace democracy, confront corruption and firmly reject terror” if they sought US support in achieving statehood. If the Palestinians met all these conditions, such a state could become a reality in the next 18 months, following which a permanent state could emerge within the next three years. While there was some mild condemnation of Israeli actions, such criticism was not backed by the threat of any sanctions.
Predictably, the US president’s speech was greeted with outrage by the Palestinians and warmly welcomed by the Israelis. As one angry Palestinian leader, Saeb Erakat, aptly put it: “Palestinian leaders don’t drop from parachutes from Washington or anywhere else. Palestinian leaders are chosen by the Palestinian people.” Meanwhile, the Israelis continue to make incursions into town after town in the West Bank to destroy what they term the “infrastructure of terror”. After marching into Ramallah and surrounding Arafat’s headquarters yet again, the Israelis sent their tanks into Hebron hours after President Bush made his speech. Bush had delayed his speech following a series of suicide attacks in Al-Quds last week, which had given Israel the pretext to launch its latest drive to reoccupy Palestinian territories. The irony is that Bush will now try and sell his vision to create a pristine western-style liberal democracy out of the ashes of the Palestinian Authority to a host of Arab countries that hardly conform to that vision themselves.
The latest US blueprint for the resolution of the Middle East crisis is doomed to fail because it does little to address the root causes of the violence. On the contrary, it gives carte blanche to the very elements that stoked the fires of violence in the first place to carry on bludgeoning the hapless Palestinians. By dwelling on peripheral issues rather than the fundamental issue of Israeli occupation, President Bush has wasted another opportunity to come up with a just and durable solution to the crisis. The latest US proposals can only fuel more anger among the Palestinians and drive an increasingly embittered section of the population to resort to further desperate acts.