PTI looking to donations for development

Critics say govt is not doing enough to broaden tax base

LAHORE: Instead of broadening the tax base to recover from the deteriorating fiscal situation, Pakistan Tehreek-e-Insaf (PTI) is showing its desperation to initiate development projects by collecting donations from philanthropists and business leaders.

On the orders of Prime Minister Imran Khan, the Punjab government has initiated the first project of the PTI regime which is a shelter home project in the provincial capital. The project aims to build five shelter homes for homeless and poor passengers traveling Lahore to explore employment opportunities.

However, considering the harshness of the winter season, the district government has already established makeshift shelter homes, on the Punjab chief minister’s directions, at five different locations in the city. On the other hand, for the construction of permanent shelter homes, the government has approached local business leaders, trade associations and philanthropists for the provision of much needed financial resources to develop and run this project.

Similarly, Punjab Governor Chaudhry Muhammad Sarwar is trying to partner or collaborate with nongovernmental organisations (NGOs), trade associations, business leaders and other potential donors for funds to install water filtrations in different areas of the province. Punjab Governor, from the platform of his NGO Sarwar Foundation, has already installed several water filtration plants in low-income neighbourhoods and district jails.

Sarwar believes that if the government constitutes an independent water authority to regulate installation and maintenance of water filtration plants, the project would be more sustainable as it is not possible to provide clean drinking water on such a large scale. The Punjab governor met with several the NGOs and trade associations for collaborations and financial assistance to make this project a success.

Similarly, the chief justice of Pakistan (CJP) and the prime minister have also established a fund for the construction of water reservoirs. People from almost all walks of life, including academia, economists, business leaders and common citizens, have a consensus over this initiative. They say the CJP and prime minister have made the right decision to establish a fund for the construction of dams.

Former finance minister Dr Salman Shah said the nation had forgotten about water reservoirs, owing to the politics over Kalabagh Dam. “The CJP has sensitised the nation about the severity of the water issue. Water is the key to poverty alleviation as desperation was rampant in water scarce areas.”

He underscored that with current economic situation, with around 7% fiscal deficit does not allow the government to allocate resources for development spending. “The government has to introduce drastic austerity measure besides increasing social sector spending to bring the country out of this situation. Since the government has very little space to maneuver, there is no harm if it seeks cooperation from private sector for such schemes,” he said.

He added that such partnerships make these projects sustainable, but it does not mean that the tax machinery is exonerated of its inefficiency. “It has to play its role to efficiently,” he underlined.

Another economist and head of LUMS Economics Department, Dr Ali Cheema, underscored the need of a policy framework for making such a partnership happen. He indicates that it is the responsibility of the local government, which is yet to be introduced in the province by the PTI government. “Usually, local governments build such partnerships for community ownership.” He also underlined that these partnerships will make projects sustainable, but should also have some policy framework.

“We are awaiting the new local government law so it would be early to comment over its effectiveness. If the government introduces really robust legislation, it will help in strengthening these initiatives,” he said. The economist stressed that the tax machinery has a very important role for arranging much needed resources for development. “There is a lot of potential of local taxation,” he added.

“The government’s role is to provide a conducive environment and encourage investment. The private sector will bring innovation and technology to fuel the engine of growth in the country,” he maintained.

However, opposition parties, business community and critics believe that the government lacks vision in running economic affairs. They underscored that the country or development schemes cannot be run over donations. The government has to increase development spending by increasing the tax base.