The Punjab’s finances are the worst managed in all the federating units. A provincial government running on fiscal overdraft presents a stark comparison to one that once used to deposit in the banking sector the revenue it collected on behalf of the federal government and drew interest before it was due to the centre. The present government’s penchant for grand populist projects has bled the exchequer dry enough to make meeting even the provincial wage bill a tall order.
The chief minister, however, has seen it fit to announce that the Punjab government is not to accept any foreign aid for its development programs, all without specifying how his government plans to cover the difference. Since the chief minister also didn’t give a time-frame for the implementation of this policy and also peppered it with the fact that the proposal will still be put up to his party’s leadership (it’s supposed to be the other way around) we can be near certain the announcement isn’t going to be followed up seriously.
With the projected foreign-aid component of the development program this year to be up to twenty percent, the numbers just don’t add up. But the League government is no stranger to the grand art of the bad decision. A cycloptic obsession with the sasti roti scheme, an opulent plan for the ill-thought out Danish School System and a fascination with the urban (read Lahori) built environment, specifically roads, all without casting a serious glance at the provincial receipts has been the key ingredient of the fiscal woes of the government.
Foreign development aid is notoriously inefficient. And if it is given as part of a loan program instead of a grant, it should definitely be thought through. But a dependence on foreign assistance is weaned away after the state builds up its own apparatus to collect revenue. Does the League, or any other government, have anything to show for itself on that front? Of all the political parties, it is the Muslim Leagues and the MQM that seem to be intrinsically anti-taxation. Chest thumping isn’t going to get us anywhere; less testosterone, more work.
