June 12, 2006	Monday	Jumadi-ul-Awwal 15, 1427

THE Punjab government has recently finalised the Poverty Focused Investment Strategies (PFIS) for six key sectors – health, education, water supply and sanitation, housing and urban development, the SMEs (including the Punjab Small Industries Corporation (PSIC), and livestock and dairy development, as part of its efforts to reduce the extremely high incidence of poverty in the province. The PFIS for Punjab have been developed under the Punjab Resource Management Programme (PRMP), and was released during the third Punjab Development Forum last month.

The formulation of the PFIS for Punjab is described as an “attempt to drive forward the process of public sector reforms in general and refocus public sector expenditures towards sectors and areas that have the greatest impact on poverty reduction in particular”.

The PFIS for Punjab draws upon earlier policy papers and strategies like the Punjab Poverty Reduction Strategy Paper (PRSP), the Chief Minister’s Vision 2020, and the Punjab Economic Report (PER), which have been churned out by the provincial government during the last several years, expressing its commitment to reduce poverty and improve delivery of social services and to reorient the public sector development programmes and services to meet the objectives of full employment, full literacy, highly educated, and poverty-free society by 2020. The sector strategies developed in PFIS are said to be directed to achieve these objectives.

The strategies formulated in the document for individual sectors give an overview of the existing state of affairs, pinpoint issues of quality of services and delivery, concerns over lack of or weak governance, and human resource and infrastructural constraints before proposing future course of action for service delivery and coverage for the departments concerned.

There are several themes that cut across strategies for different sectors.

Devolution has been presented in the document as another major theme in the PFIS for Punjab. It says the PFIS achievement is not possible without a strong, district-based targeting regime instituted through conditional grants mechanism. “Vertical programmes may be necessary in the short run, given constraints in the districts and given commitment to the MDGs, but are not conducive to the building of institutional capacity and the strengthening of local accountability relationships that can best ensure sustainable improvement in the longer run. The province-district relationship needs to be based on handholding,” the PFIS document says.

Another theme that emerges in the strategies formulated under the PFIS for Punjab underscores the need for involving the private sector as a partner of the public sector to achieve the targets set under the Vision 2020. The document realises that “time and resources required to achieve the MDGs may not be available within the government, but they are not beyond reach if the private and non-government sectors are factored into the equation – not just as players that need to be monitored or watched out for, but as equal and positive partners who have as much to gain from a prosperous and healthy, literate society as anyone else.”

Yet another important theme that emerges from the study of the PFIS for Punjab relates to predictability and availability for finances over a medium- term under the medium-term budgetary framework (MTBF) for the targeted sectors. The document points out that the low levels of absorptive capacity in the departments, the lack of comprehensive and actionable strategies for (a given) sector justified by evidence and backed by theory, and the absence of effective execution strategies targeting earlier implementation failures are the major constraints in the provision of services to the users in Punjab. The availability of financing for the provision of social services is no longer a constraint since the provincial departments are assured of substantial levels of predictable funding over the medium term.

Over the last few years, the increased availability of funds from the federal government under the National Finance Commission (NFC) Award and in the form of soft loans for budgetary support from the multilateral donors like the World Bank and the Asian Development Bank have allowed the provincial government fiscal space to divert resources to sectors that have been targeted in the PFIS document. It has also allowed the province to increase its annual development outlay to new, record levels. The development budget for the outgoing fiscal year was set at Rs53 billion or 23.62 per cent of its revenue receipts as compared to Rs21 billion or 16.73 per cent of the total provincial revenue receipts in 2001-02.

Several programmes funded from own resources or grants and soft loans received from international donors were undertaken to eliminate or reduce the deficits in the social sectors. But all these efforts seem to have failed to bring about any major, visible improvement in the provision and delivery of public and social services to the majority of the citizens of the province. Even if any development programme or initiative, like the World Bank-funded Punjab Education Sector Reforms Programme (PESRP), managed to create an impact, it was limited. And this fact has been directly and indirectly admitted in the PFIS document. Social indicators in Punjab remain as depressing as in the 1990s or before when the province was faced with a big crisis of lack of financial resources and was forced to borrow from the federal government at heavy interest rates to fund its current and development expenditure.

The substantial increase in the availability of finances for development since the beginning of the present decade has so far failed to improve the quality of life of or provide very basic services like clean, piped water to an overwhelming majority of the people as is clearly shown by the recent incidence of spread of gastro-enteritis, which has claimed several lives in the last few weeks, in Faisalabad and other districts of the province because of the polluted water. The regional disparities in the province as indicated in the multiple indicators cluster survey (MICS) are on the rise. The people of the province continue to face the decades-long crisis of unavailability or low quality of public service delivery.

The PFIS and other such strategies notwithstanding, the ground reality amply implies that the policies being pursued by the rulers of the province have more to do with their political ambitions rather than cater to the basic needs of the hapless citizens of the province. Unless there is a strong political will to improve the quality and coverage of public and social services and unless the state realises its constitutional role of main service provider, PFIS and other so-called policy interventions will not work.