Last week, the Balochistan government presented its budget for the fiscal year 2020-21. The total outlay for the province is Rs465 billion, which is 22.4 percent higher than the revised budget of last year. The current expenditure has increased by 18 percent to Rs294 billion and development expenditure by 50 percent to Rs156 billion. The most surprising thing is that Balochistan’s budget comes with a deficit of staggering Rs87 billion. To put it in context, last year’s deficit was Rs47 billion.
Since this budget was presented in the midst of the COVID-19 crisis, there was greater emphasis on the health sector. The health budget was increased by 31 percent to Rs31 billion rupees. Within this budget, the government has allocated Rs4.5 billion for COVID-19 response only. This is a huge allocation to deal with the COVID-19 crisis, provided that it is spent efficiently and timely.
The health budget also includes the questionable allocation of Rs2.5 billion for the purchase of an air ambulance. The government has another project called Medical Emergency Response Center (MERC) where they use ambulances to provide medical relief to victims of highway accidents. The government has only allocated Rs100 million for that project despite the pending amount of over Rs2 billion. While MERC is undergoing a financial crunch, the government has allocated a whopping Rs2.5 billion for an air ambulance. This speaks volumes about the financial planning of the government.
Furthermore, there are two other problems with the purchase of an air ambulance. It appears that the government has given up on improving the quality of healthcare in the province. Now they just want to airlift serious patients to Karachi and not improve the condition of hospitals in the province. Secondly, one air ambulance cannot cater to the needs of 12 million people. It will only benefit a handful of parliamentarians and influential bureaucrats.
The development budget and Public Sector Development Program (PSDP) is the most favourite component of the budget for the public and government alike. Last year, Rs100 billion were allocated for PSDP, which has been increased to Rs106 billion this year. Last year, Balochistan could only authorise 74 percent of its PSDP and thus the claims of the government of record development spending are incorrect. Therefore, this year it remains to be seen how much of the PSDP can be utilised.
In the PSDP, about 28 percent has been allocated to the Communication and Works department, which is a favourite for the politicians given its potential to earn huge kickbacks. Around 18 perent of the PSDP has been allocated for irrigation and public health engineering, which is a good decision, given the water shortage in the province. However, the government needs to ensure that this high allocation is spent fairly.
This budget is a COVID-19 budget, and hence there was an expectation that it might involve an economic recovery plan. However, this is not the case and any potential economic recovery is the allocation of funds for creation of 6,840 new job vacancies. Given the track record of previous years, it would be nearly impossible to hire on all these announced vacancies.
Noorul Haq Baloch, finance secretary of Balochistan government, explained the budget to this scribe in detail via a Zoom session. Addressing the question of the Rs87 billion deficit, he said that for Balochistan a high deficit budget was always a good budget. “Due to the high number of vacant posts every year, we get to save a lot on allocated expenditures and as a result, we can cope with the deficit,” he said.
Elaborating the steps of government for economic recovery, he claimed that the government has initiated small business loans of Rs25,000 with the help of Akhuwat organisation. “Vulnerable people of the society will get microfinance loans of Rs25,000 which they can repay easily in small instalments over a long period of time,” he added.
The secretary complained to this scribe positive developments by the government in the budget do not get coverage in the media. He claimed that the government has tabled Balochistan Financial Management Bill, becoming the first province in Pakistan to comply with the requirement of Article 119 of the Constitution. “Once approved, this bill will put the financial management of the province on track and it will be mandatory for the government to present a mid-term financial performance review of the budget spending every tear,” Baloch said.
Furthermore, education always takes up a huge chunk of resources of the provincial budget every year. This year the provincial government has increased grants in aid to public universities from Rs1.5 billion to Rs3.94 billion. This is a welcome move because it would provide a temporary breathing space to universities that are under financial pressure due to cut in funds of HEC by the federal government.
Moreover, the budget also includes allocation of funds for the establishment of the University of Loralai sub-campus in Barkhan district. University of Loralai itself is struggling to kick-off with only 500 students and now the government wants to build a sub-campus of this university in the adjoining district of Barkhan. Sub-campuses of universities so far have proven to be a waste of financial resources. In fact, the government of Balochistan must announce a moratorium on the establishment of new sub-campuses.
The volatile security situation is also reflected in the budget of the province. This year’s budget for security has been increased by 18 percent to Rs48 billion. Now, security consumes 16.5 percent of the total current expenditure budget of the impoverished province of Balochistan. As long as the situation remains volatile, security will continue to eat up a significant portion of the resources of this poor province. Likewise, the law and order budget includes Rs22 billion for police and Rs12 nillion for Levies, which covers a greater area and performs far better than police.
Lastly, the budget documents also that the government of Balochistan will receive foreign loans of Rs8.66 billion and repay loans of Rs5.84 billion this year. Total foreign loan obligations by the government of Balochistan stand at Rs50 billion. Balochistan government needs to be transparent about these loans and all of its details must be made public.
The writer is a journalist and researcher. He can be reached on twitter: @iAdnanAamir
Since this budget was presented in the midst of the COVID-19 crisis, there was greater emphasis on the health sector. The health budget was increased by 31 percent to Rs31 billion rupees. Within this budget, the government has allocated Rs4.5 billion for COVID-19 response only. This is a huge allocation to deal with the COVID-19 crisis, provided that it is spent efficiently and timely.
The health budget also includes the questionable allocation of Rs2.5 billion for the purchase of an air ambulance. The government has another project called Medical Emergency Response Center (MERC) where they use ambulances to provide medical relief to victims of highway accidents. The government has only allocated Rs100 million for that project despite the pending amount of over Rs2 billion. While MERC is undergoing a financial crunch, the government has allocated a whopping Rs2.5 billion for an air ambulance. This speaks volumes about the financial planning of the government.
The provincial government has increased grants in aid to public universities from Rs1.5 billion to Rs3.94 billion
Furthermore, there are two other problems with the purchase of an air ambulance. It appears that the government has given up on improving the quality of healthcare in the province. Now they just want to airlift serious patients to Karachi and not improve the condition of hospitals in the province. Secondly, one air ambulance cannot cater to the needs of 12 million people. It will only benefit a handful of parliamentarians and influential bureaucrats.
The development budget and Public Sector Development Program (PSDP) is the most favourite component of the budget for the public and government alike. Last year, Rs100 billion were allocated for PSDP, which has been increased to Rs106 billion this year. Last year, Balochistan could only authorise 74 percent of its PSDP and thus the claims of the government of record development spending are incorrect. Therefore, this year it remains to be seen how much of the PSDP can be utilised.
In the PSDP, about 28 percent has been allocated to the Communication and Works department, which is a favourite for the politicians given its potential to earn huge kickbacks. Around 18 perent of the PSDP has been allocated for irrigation and public health engineering, which is a good decision, given the water shortage in the province. However, the government needs to ensure that this high allocation is spent fairly.
This budget is a COVID-19 budget, and hence there was an expectation that it might involve an economic recovery plan. However, this is not the case and any potential economic recovery is the allocation of funds for creation of 6,840 new job vacancies. Given the track record of previous years, it would be nearly impossible to hire on all these announced vacancies.
Noorul Haq Baloch, finance secretary of Balochistan government, explained the budget to this scribe in detail via a Zoom session. Addressing the question of the Rs87 billion deficit, he said that for Balochistan a high deficit budget was always a good budget. “Due to the high number of vacant posts every year, we get to save a lot on allocated expenditures and as a result, we can cope with the deficit,” he said.
Elaborating the steps of government for economic recovery, he claimed that the government has initiated small business loans of Rs25,000 with the help of Akhuwat organisation. “Vulnerable people of the society will get microfinance loans of Rs25,000 which they can repay easily in small instalments over a long period of time,” he added.
The secretary complained to this scribe positive developments by the government in the budget do not get coverage in the media. He claimed that the government has tabled Balochistan Financial Management Bill, becoming the first province in Pakistan to comply with the requirement of Article 119 of the Constitution. “Once approved, this bill will put the financial management of the province on track and it will be mandatory for the government to present a mid-term financial performance review of the budget spending every tear,” Baloch said.
Furthermore, education always takes up a huge chunk of resources of the provincial budget every year. This year the provincial government has increased grants in aid to public universities from Rs1.5 billion to Rs3.94 billion. This is a welcome move because it would provide a temporary breathing space to universities that are under financial pressure due to cut in funds of HEC by the federal government.
Moreover, the budget also includes allocation of funds for the establishment of the University of Loralai sub-campus in Barkhan district. University of Loralai itself is struggling to kick-off with only 500 students and now the government wants to build a sub-campus of this university in the adjoining district of Barkhan. Sub-campuses of universities so far have proven to be a waste of financial resources. In fact, the government of Balochistan must announce a moratorium on the establishment of new sub-campuses.
The volatile security situation is also reflected in the budget of the province. This year’s budget for security has been increased by 18 percent to Rs48 billion. Now, security consumes 16.5 percent of the total current expenditure budget of the impoverished province of Balochistan. As long as the situation remains volatile, security will continue to eat up a significant portion of the resources of this poor province. Likewise, the law and order budget includes Rs22 billion for police and Rs12 nillion for Levies, which covers a greater area and performs far better than police.
Lastly, the budget documents also that the government of Balochistan will receive foreign loans of Rs8.66 billion and repay loans of Rs5.84 billion this year. Total foreign loan obligations by the government of Balochistan stand at Rs50 billion. Balochistan government needs to be transparent about these loans and all of its details must be made public.
The writer is a journalist and researcher. He can be reached on twitter: @iAdnanAamir