THE coalition government in Balochistan has taken a few bold initiatives in its 05-06 budget but without proper homework which create doubts about the outcomes. Syed Ehsan Shah, the Balochistan Finance Minister in his budget speech on June 22 announced the abolition of all fees and charges except the admission fees on education up to higher secondary level in the government-run institutions.
”Education is our top priority and provision of free education up to higher secondary education is a step towards this direction’’, the minister declared while informing that his government is spending about Rs2 billion every year on education.
In his statement the next day at the post- budget press conference, the minister did not make even a casual reference to his announcement on free education. When reminded of his announcement and asked to about the number of students in the government-run institutions and the impact it will have on the provincial budget, the minister had no answer.
“Probably, the Balochistan government wants to outsmart Punjab and Sindh where education up to matriculation has been declared free’’ a journalist remarked which was taken in the stride.
Another major initiative in the 05-06 budget is about offering state farms to private sector for corporate farming. Ehsan Shah had also no information on the number of government farms. The provincial finance secretary Mahfooz Ali Khan however informed that there were 35 agricultural research and extension services farms, but he had no idea about the acreage of these farms.
The government is yet to work out criteria for selecting private parties and is yet to work out the modalities of the corporate farming. The minister and the officials of his department have no idea of the time span involved in all these formalities and when the process will begin.
Yet another decision of the far-reaching implication is to give ownership rights to the occupants of the houses constructed on government land in Quetta and many other urban centres. Here again, the announcement has been made without any survey.
A major decision is taken about converting the buildings of Uthal and Bolan textile mills into technology academies where young Baloch men will be trained in various modern disciplines. These two textile units were set up in the decade of seventies by late Bhutto government and these were Pak-Iran joint ventures. But located far from the cotton supply sources, these two textile mills never worked as viable units.
After declaring the machinery junk, the Balochistan government has now decided to use the massive buildings of the two textile units for technology centres. The two buildings are being equipped with machines and equipment.
As if all these initiatives were not enough, the minister announced to give 10,000 new jobs in the government which according to his budget is expected to suffer a deficit of Rs13.24 billion in the year 05-06.
The finance minister presented a budget of Rs46.37 billion budget for the year 05-06. It has a current revenue expenditure budget of Rs34.61 billion against an indicated resource position of Rs27.55 billion showing an operational shortfall of Rs5.44 billion on the current revenue side. The development outlay for the year is Rs11.76 billion against which a sum of Rs2.76 billion is indicated from the foreign assistance while Rs9 billion annual development programme is unfunded allocation.
The Balochistan government has pinned high hopes about President Pervez Musharraf’s promised announcement of the National Finance Commission award anytime during the year 05-06. “We expect an additional inflow of Rs8 billion from change in the NFC formula’’ the finance minister said while pointing out that it would reduce the budget deficit to Rs5.24 billion. He was confident of offsetting this budget deficit with savings and other measures.
Like Sindh, Balochistan too has suffered the implications of the 1997 NFC award. The resource gap in the provincial budget since 1997 went on increasing because the revenue growth rate failed to catch up the corresponding growth in expenditures. The growth in federal transfers too, did not match the expectations of the province. These shortfalls and the resource gap has led to increased deficits and ultimately to debt accumulation. The receipts in the provincial budgets since 1997 show an average annual growth of 10.44 per cent.
The receipts include both the federal transfers under NFC and grants and from the provincial revenues. But the growth in the development and the current revenue expenditure since 1997 showed haphazard annual growth between 7.58 to almost 30 per cent in a year.
As much as 75 per cent of the non-development expenditure of the province is spent on salaries, pensions and debt servicing cost. Out of Rs26.17 billion current revenue expenditure in 2003, the salaries and pension took up more than Rs13 billion while Rs5 billion were given for debt servicing.
Total loan liability on Balochistan by end June 2004 was estimated at Rs45.16 billion that included Rs9.30 billion block loan of the State Bank of Pakistan.
Syed Ehsan Shah wants to add 10,000 employees to the existing 350,000 workforce of the provincial government which will take up the wage bill and also make the working environment difficult. “We have neither a developed private nor the public sector which would provide job opportunities to young Balochs’’ argued the finance minister who said the only avenues are in the provincial government. His estimate is that the public sector’s total capital base is Rs50 billion. “If we invest Rs5 billion in Balochistan, there can be substantial job opportunities’’ he says.
But the finance minister in his budget speech did not say anything on the Gadani ship breaking yard and the industries at the Hub Industrial Estate. The Gadani yard has been the main supplier of steel billets during sixties and seventies on which Karachi’s construction industry thrived. Now that there are signs of revival of construction in Karachi, the Balochistan government could activate the Gadani yard. Both— Sindh and Balochistan— can negotiate with Islamabad for a package for helping the Gadani yard to expand production of steel for construction purposes.
Hub’s industrial estate has also immense potential. If generous bank loans can revive the unutilized capacities of industries in Punjab and Sindh, why can’t this be done at Hub.
Balochistan’s problems are unique. Its vastness, almost 43 per cent of Pakistan’s total land mass has put a lot of strain on its resources. Population is too sparse—7.5 million—water is scarce and settlements are not linked with roads. The provincial service delivery cost is highest when compared to all other three provinces.
And the irony is that neither politicians nor the bureaucracy is well equipped to surmount these problems and plan judicious utilization of whatever resources that are available.
Politics apart, Balochistan has received some attention from Musharraf government. It is not Afghanistan this time but Gwadur that has brought Balochistan into limelight. One can feel and even see intense urge and desire in the Baloch young men to catch up with their compatriots in other parts of the country. They want to learn and acquire skills to run and manage port functions and the services that will emerge in the province after Gwadur port becomes fully operational.
Their only fear is demographic imbalance after the Gwadur port becomes operational which will reduce them to nothingness. It is more a psychological problem rather than a political issue which has not been addressed by those who control Pakistan’s destiny.
