While it is not clear what will become of Pakistan Railway’s idea of leasing its land to ease fiscal constraints, the idea is sound, and should be taken further. Senior executives in the planning commission have long advocated turning inefficient government landholdings into profitable enterprises. Railways presents the most fitting example. It owns large areas of land, almost all injudiciously utilised. Pretty much the same is true for other government organisations. And considering prevailing circumstances, such land is best sold to private sector and corporate use, especially if it is close to commercial centres. Not only does such an arrangement stand to increase fiscal elbow room, but will also cut down on needless fixed cost, freeing the land for more profitable enterprise.
Such measures are essential to add marketable density to city centres. Presently, our main urban centres, while flush with individuals driven from the periphery, are short of adequate commercial activity, which can be achieved by targeted reforms. Following these patterns played an effective role in establishing regional commercial hubs like Singapore, Dubai and Hong Kong. In Pakistan’s big cities, we have ample space that can be turned into viable commercial centres. Yet the official position continues to patronise the wasteful system that hinders meaningful progress.
In principle, all available avenues of enhancing revenue should be exhausted before reaching out for aid to finance economic activity. In the Pakistani context, far too many potential avenues for raising serious revenue remain locked in passive government control. This position is not only contrary to the economic model we follow, but also counter productive considering our immediate needs. Sick enterprises like Railways should no longer be bailed out by the government. They should first cut large holdings so their dependence on bailouts lessens, then the lands should be used for meaningful commercial activity.