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Sindh’s financial crisis

July 31, 2012

THE government did not release Rs15bn from its share, and resultantly the province is facing a financial crisis. It was not able to release Rs66bn for the annual development programme and retired employees’ gratuities. Last year similarly, when the federal Ministry of Finance did not release funds, it became difficult for Sindh to pay its employees the Eid advance. …

Owing to the Federal Board of Revenue’s ineffective recovery system and the irrelevant expenditures incurred by the federal government and its army of ministers, the former has to rely on borrowing from the State Bank. In this scenario, it has not been making funds available to the Sindh government. The provincial government has to meet its expenses by taking loans from the State Bank, and thus take on interest payments. Development projects are not started on time, which increases their cost due to rising inflation. …

Last year, even though the FBR achieved its target, funds were not released to Sindh. The federal government is supposed to release funds for six months at the beginning of each new financial year. But it has not become routine for funds to be transferred on a monthly basis….

Of course the financial crisis is a global phenomenon; the economies of some developed countries have collapsed…. Earlier, people from developing countries used to go the developed world for jobs and earning, but now that world too is facing unemployment. Pakistan is among the countries where no effort has been made to generate new resources.

Pakistan will have to accept that if a balance is not maintained between income and expenditure, it will only have to take on more and more loans. Military expenses must be curtailed, corruption has to be controlled and the army of ministers and their extra expenses have to be brought down.… Otherwise, we will have further poverty and unemployment.

This situation requires the federal government to maintain a fine balance between income and expenses and spend more on development sectors. — (July 30)

Selected and translated by Sohail Sangi.