Lessons from provincial budgets

Lessons from provincial budgets
The members of Sindh Assembly cheered in unison as provincial Finance Minister Murad Ali Shah presented the annual budget. On the other hand, PPP legislators raised the roof with their protests against the PMLN government when Kamran Michael was presenting the annual budget for Punjab.
Ironically, it is the latters intended approach to the coming fiscal that envisages more practical measures to create jobs and generate growth.
Judging by the budget speeches delivered in both provinces, one may be forgiven for assuming that the general elections are closer than they appear. There are no new taxes being imposed on inhabitants of both provinces and each has increased allocations for education and healthcare.
However, a closer scrutiny of the announced schemes shows that the Sindh government still equates job creation with filling government departments with thousands of new employees. Flanked by his team of policymakers, Shah proudly informed reporters that the new budget would create 17,000 new jobs.
"More than 13,000 jobs are for district governments and rest for various provincial departments," said Shah.
In contrast, the Punjab government has opted for a facilitative role by announcing schemes for assisting self-employment, providing interest-free loans, subsidised land leases for agricultural sciences graduates and the return of the yellow cab scheme.
In the past, yellow cabs and green tractors have had little economic purpose beyond turning the national exchequer black and blue. "Vast misappropriations and defaults are synonymous with the first yellow cab scheme and its re-launch is also more of a populist measure than one that will bring economic progress," commented a senior policymaker, speaking on the condition of anonymity.
However, the transparency and effectiveness of the yellow cab scheme as well as other measures can only be judged once these programs are rolled out. Suffice to say that these measures appear to be better than expanding the governments own circle of influence; at least in theory.
The establishment of Sindh Bank and Sindh Land Development and Management Company clearly shows that the provincial government is desperate to perform every role by itself. The plethora of businesses that the government is spreading into is startling; especially when viewed against the narrowing down of projects eligible for developmental spending.
While the policymakers of the southern province can learn some lessons from their northern brethren, both need to move beyond the woeful practice of handing out cheques. Kamran Michael went extempore in his budget speech by adding, "We want to teach them how to fish instead of giving them a fish".
Unfortunately, however, these words have not translated into adequate policy measures in the Punjab budget either. In this vein both provinces can do more to create a more conducive environment for the development of the private sector.
There is also a dire need for the outsourcing of computerisation of land and property ownership records in both provinces. Concrete moves in this direction can make mortgages more accessible for residents living outside the DHA schemes of Karachi and Lahore; not just in these cities but in other towns as well.
As always, the proof of the pudding is in its eating. Despite the apparent largess being flaunted in the provincial budgets, it is noteworthy that in the outgoing fiscal similar tall claims were chopped short due to lack of fiscal space.