Rs one trillion spent on poverty reduction in 5 years: report


ISLAMABAD (April 10 2005): Total budgetary and non-budgetary pro-poor expenditures during last five years (1999-2004) stood at Rs 1 trillion, according to a recent release of Finance Ministry. PRSP expenditures by the federal and provincial governments stood at Rs 125 billion during the first half of the current fiscal year. These expenditures are approximately 27 percent higher than the expenditures incurred during the same period of last fiscal year (FY04). PRSP (poverty) expenditures during the first half of FY05 were more than 2 percent of GDP as compared to 1.8 percent during the corresponding period of FY04.

This acceleration in the macro economy with the increased pro-poor expenditures appears to have contributed in employment generation in the country. The rising trends in unemployment have been arrested, particularly among females in rural as well as urban areas.

All PRSP pro-poor sectors, except 'food subsidies', rural electrification and 'natural calamities', have witnessed an increase in the expenditure during the first half of ongoing fiscal year as compared to the corresponding period of FY04. However, there is a large sector-wise variation. A strong growth in low-cost housing is solely based on expenditures by Punjab province, as remaining provinces made no expenditures in this sector in the first half of current year as well as first half last year.

Housing is one of the key sectors for poverty reduction. Shelter is one of the necessities of life. Moreover, development of this sector is labour-intensive in nature, which creates employment opportunities for the poor, particularly semi- and unskilled workers. Therefore, Sindh, NWFP, and Balochistan need to invest on the low-cost housing sector.

A substantial increase in expenditure on education, health and population planning sectors were also witnessed during the first half of the current fiscal year as compared to last year's corresponding period. These expenditures, as percentage of GDP, were also higher in FY05 than in FY04. This increase is crucial for supporting the efforts in improving the human capital and population stability in the country.

Several MDG targets endorsed by the government of Pakistan and aligned with the PRSP are related to education, health and population.

An overall decline of 5 percent in primary education sector was witnessed. This decline was primarily due to decline in Punjab and Balochistan provinces. There was a considerable increase in primary sector education in NWFP while it was relatively modest in the case of Sindh and federal expenditure.

During the first half of FY05, expenditure in secondary education increased by 17 percent as compared to the same period in FY04. A decline was witnessed in federal and NWFP expenditures on college/university education. Federal expenditures in sub-sectors of technical education and training also declined in the first half of FY05, as compared to spending in the same quarter of FY04.

In Balochistan, two important sectors, education and rural development, witnessed a decline in expenditure during the first half of the current fiscal year as compared to expenditure during the same period in FY04. Rural development expenditures also declined in Sindh. There is a need to strengthen the monitoring system at the province level so that resources are allocated efficiently to achieve the targets.

Sector-wise expenditure situation during the first half of the current fiscal year seems to be satisfactory in Punjab.

A considerable progress in increasing development expenditures in the health sector during the first half of the FY05 has been made, except Punjab and Sindh provinces.

Under the PESRP, improvement has been observed in education related intermediate and output indicators. The MDG 2004 report has also indicated some improvement in health output indicators.

The non-budgetary transfers, Zakat, EOBI, and Credit (PPAF and Khushali Bank) during the first half of the current fiscal do not show a satisfactory situation. Overall, a decline of 29 percent was observed in non-budgetary transfers. This decline was much higher, 41 percent, in terms of number of beneficiaries of these transfers. The amount of Zakat disbursed during the first half of the current fiscal year was approximately 60 percent lower than the zakat disbursed during the same period in FY04.

Zakat is largely distributed in Ramazan, which fell last year in the months of October and November. But it appears that the volume of zakat distributed during the month of Ramazan was relatively low. No doubt, there is a considerable leakage of Zakat to the non-poor segment of population, and the system is not functioning efficiently. But, Zakat has been a major source of income for many poorest of the poor households. Zakat system may be improved and more resources may be made available for the poor. It may also be distributed timely.-PR


Copyright Business Recorder, 2005