The Sindh government is bristling against the double inequity it is meeting with at the hands of the federal government in their financial dealings despite the fact Sindh is the largest revenue-provider to the centre.
While the centre gets large loans written off by the donors or re-scheduled at vastly concessional rates, it does not meet out the same concessionary treatment to Sindh and that has been happening despite the fact Sindh has to meet in annual debt servicing burden of Rs11 billion.
It has then to scramble for funds for the economic and social sector development of the province which is often starved of the requisite funds, it has also to meet the galloping current expenditure in a usually misgoverned province.
To make the situation far worse, Sindh has to pay an interest rate of 14 to 16 per cent on its loans of Rs46 billion instead of the market rate of 2 to 3 per cent. And that includes the more costly debt of Rs6.4 billion which it is anxious to pay off quick following the federal model.
The centre has the province by the neck in all these areas. And it has not been able to find real relief. Hence Sindh's insistence that the provincial revenue contribution to the federal revenue pool should be taken into consideration while deciding the division of the federal revenue pools for the provinces, a proposition which does not find favour with other provinces.
In addition Sindh has to receive a large number of people from other provinces each year and make provision for their accommodation in 'kutchi abadis', apart from those who occupy developed areas as they get good jobs.
Such accommodation and the law and order problem that gives rise to costs a great deal of money, which is not shared by the federal or other governments from whose areas the people come to Karachi and other areas in Sindh.
The slums which much constant migration creates is a real problem for the province and costs a great deal financially. One of the options which the Sindh government wants to use is to borrow directly from the market at the prevailing low interest rates to repay some of the old loans as well as meet the current need for funds to make the Sindh public sector financing rational and truly economic.
But the centre has yet to give such blanket permission for fear it may over-borrow and land itself in excessive trouble. The World Bank and the Asian Development Bank (ADB) are, however, giving direct loan to Sindh as well as to other provinces, including the MMA-ruled Frontier Province. The ADB has now committed to provide $220 million for the Sindh Devolved Social Services Programme.
The centre is by now ready to reduce Sindh's federal debt but it wants the provincial government to eliminate or vastly reduce the leakages, waste and corruption in the provincial administration.
There is plenty of scope for such reduction, if not their elimination altogether. But the Sindh government has not been trying hard, with its large cabinet and too many advisers and other officials needlessly appended to the government. The Revenue Department in particular needs radical pruning to cut its vast waste and increase the revenues.
Sindh's debt can be reduced through other means as well with the cooperation of the centre. Sindh has to recover from the centre Rs9 billion for providing land to the armed forces and the Civil Aviation Department.
Sindh has also to recover its dues of Rs 3 billion from the Centre, which makes a total of Rs 12 billion. One estimate says that if the centre helps the province by reducing its debt it can save Rs 1.2 billion annually on interest payments.
The managers of the Sindh finance department led by the finance minister Syed Sardar Ahmad have brought to the notice of the Chief Minister, Dr Arabab Ghulam Rahim, the seriousness of the financial problem which Sindh faces and the urgency for remedial action.
The aggravated financial problems which Sindh now faces are the result of: (1) the 15 per cent increase in the dearness allowances to all government employees; (2) the wheat subsidy of Rs4 billion; (3) the annual pension demand of Rs6 billion; (4) added to that is the debt servicing cost of Rs11 billion.
All this expenditure, say the officials, may leave too little of funds for the Annual Department Programme of Rs18 billion, in addition to Rs2.8 billion of foreign and federally funded programmes.
The senior officials have warmed the Chief Minister that if strict economic measures are not taken Sindh can face a serious economic crisis and the development programme could be jeopardized.
The officials caution that even if there is provision for retaining the expenditure in the budget, utmost economy should be effected in such expenditure.
Officials have pointed out that jobs given to officials without posting should be regularized and such officials should be given proper jobs. Employment of non-essential employees on contract jobs should be done away with.
Extension of jobs given to officials over 60 years should be terminated. The fact is there are too many changes at the level of secretaries in the Sindh government, and such changes at the whims of the ministers or others should be done away with.
Ministers and others should learn to work with the secretaries available to them instead of changing them frequently. The finance managers have asked the Chief Minister to take effective measures to reduce the use or waste of electricity, phones and POL, with the ministers and secretaries having too many cars, drivers and excessive use of petrol.
They have also suggested that hundreds of vehicles which are out of order and parked in district headquarters now should be auctioned. Such economy measures have not been a part of the Sindh Government for a long time.
May be the government is well advised to set up an economy committee to probe into the working of six or seven profligate departments, including the revenue department, the PWD and the education department.
Economy measures in the government demand political stability and the freedom for chief ministers to act in the right direction without fear of consequences. The provincial assembly too, has to support the government.
But Sindh has not experienced political stability for long. There has been greater efforts to please the dis-conteded political elements, to provide jobs and pacify and please the local officials.
So if an economy committee cannot be appointed for political reasons let a few NGOs be authorized to undertake studies of the departments they were dealing with to prevent their waste and increase their efficiency.
A beginning has to be done now when there is so much talk of good governance in a province in which bad governance and gross waste of public funds are too common and ever-lasting.
