In his budget speech, Chief Minister Qaim Ali Shah said that the provincial government intended to associate private sector, civil society and reputed NGOs and private bodies with the running and managing government schools, dispensaries and other organisations.
This year’s Rs267.8 billion provincial budget has earmarked a PSDP of Rs77.31 billion. The education budget has been raised by 16 per cent to Rs19.5 billion while the health budget is up by 25 per cent up to Rs10.85 billion.
“The children of our peela schools (yellow coloured government school buildings) wearing peela uniform will never be able to compete with children of private schools’’, the chief minister said while admitting about the poor quality of education in government schools in his budget speech before the provincial assembly.
In his post-budget press conference, he elaborated his strategy for running public sector schools efficiently saying: ‘’We will give money to run schools-salaries of teachers and other employees and on other counts-but we will ask members of civil society, NGO’s or reputed private organisations to manage the affairs. The management efficiency will be judged by the results of examinations and the quality of education and of course, the number of children-boys and girls- enrolled in the school.
‘’Government departments are expected to set up rules for public-private partnership’’, a principal of a government school said, expressing fears that eventually this concept may become bogged down under files on desks of bureaucrats.
After visiting two government hospitals in Karachi, the chief minister wondered as to how the hospitals would be running in the remote areas. He announced upgrading district hospitals, making it compulsory for government teachers, doctors and officers to serve at least for three years in remote areas of the province. For this, they will be given incentives in salaries, residence and other facilities. He wants private sector to get associated in running of schools and dispensaries and other government organisations in the remote rural areas.
Among other measures, the provincial government also plans to improve its monitoring of economic indicators by setting up a Sindh Data Centre in the Sindh Bureau of Statistics.
‘’We are in consultation with Social Policy and Development Centre (SPDC), a Canadian aided private consultancy to help us in gathering of relevant information to process and carry out analysis’’, a source in Sindh government said.
Two more centres-Urban Development Centre and Rural Development Centre-are being set up to monitor economic and social indicators at the micro level in cities and villages. An allocation of Rs100 million has been made in the budget of 2008-09 for the purpose. The idea is to produce an annual economic survey of the province.
Officials say that some information on economic indicators has been gathered about the last ten months. Information for two more months are needed to prepare a comprehensive economic survey report for 2007-08 which may be available by October/November. Informal talk with some officials revealed that there is a realisation about capacity limitations in planning, development and financial management. ‘’The fundamental flaw is lack of credible information on ground realities’’, a senior official admitted who did not hesitate to acknowledge that a portion of Rs200 billion amount invested in the province’s planning and development over the last five years was not so well spent.
For improving the resource position, the provincial government has revived the project for setting up a single revenue collection authority and separating tax assessment and collection job from land management as is being done now by the provincial Board of Revenue.
The present Rs267.7 billion budget has been drawn up for the third consecutive year on an interim order passed by President Musharraf in July 2006. However, the chief minister has expressed the hope that eighth reconstituted National Finance Corporation’s award will, ‘’come in weeks, not in months or years’’.
The chief minister’s optimism was based on the fact that political alliance at the federal level and in all the four provinces was gradually consolidating and apparently a substantial ground for working out an economic consensus has already been achieved. At the post-budget press conference, the chief minister who also holds the portfolio of finance, planning and development announced to take up the issue of sales tax on services with the federal government as informally decided by ministers from all the four provinces on June 4 at Lahore.
He also felt confident that in the next NFC award, the population will not be made the only criterion for determining the share in resources. Other factors like poverty, tax collection and such other universally accepted factors will also be given due weight while allocating share of resources to the provinces.
On the fiscal side, the Sindh budget has taken two measures. The first is complete abolition of a stamp duty at rate of 0.01 per cent on face value of shares transacted electronically at the Karachi Stock Exchange. This innovative tax was proposed in 1994 by then advisor on finance Syed Asad Ali Shah.
More than generating revenue, the purpose of collecting stamp duty at the rate of one paisa of Rs10 face value of share on its electronic transfer transaction was documentation that could facilitate correct assessment of trade and business incomes of the stock exchange investors. This stamp duty was kept in limbo till 2006 when it was made a part of Sindh Finance Bill 2006. Its implementation was delayed again till the year 2008. ‘’The management of Karachi Stock Exchange had reservations on this levy, and in order to encourage further development of capital market, the government of Sindh has decided to do away with this stamp duty’’, the chief minister announced in his budget speech.
Qaim Ali Shah also an increased the rate of infrastructure cess from 0.5 to 0.8 per cent of the C and F value of imported cargo being brought into Sindh, another tax introduced in 1994. The business is already angry on levy on some aspects of taxation in federal budget and this increase of 0.3 per cent on import may further sour government-business relationship.