Govt’s pro-poor expenditure drops to Rs 3.1 trillion

Finance ministry report reveals spending on education, health decreased

ISLAMABAD: Pakistan’s pro-poor spending has gone down to Rs3.1 trillion or 8% of the total size of its economy in the last fiscal year despite urgent need to spend on human development, showed figures released by Ministry of Finance on Thursday.

The cumulative spending by the federal and four provincial governments stood at Rs3.1 trillion in fiscal year 2018-19 –down by over 2%, said Ministry of Finance.

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In terms of size of its economy, the spending on health and education amounted to only 3.34% of the Gross Domestic Product in the last fiscal year –down from the preceding year’s level of 3.6%.

The Poverty Reduction Strategy Report (PRSP) for the fiscal year 2018-19 showed that the federal and four provincial governments spent Rs3.1 trillion, down 2.2% or Rs68 billion compared with the expenditures made in the preceding fiscal year. In fiscal year 2017-18, the previous political dispensations had spent Rs3.2 trillion under pro-poor spending, which were equal to 9.2% of the GDP.

The finance ministry traces spending patterns in areas like road building, environment protection, education, health care, agriculture, rural development, law and order, justice administration and subsidies. Expenditures on all these heads are clubbed as poverty reduction expenses despite overwhelming majority of these expenditures were on account of paying salaries to the employees hired in these departments.

The federal government spent Rs1.01 trillion under the PRSP in the last fiscal year, which was up by Rs172.6 billion or 20.4%, according to the Finance Ministry.

Although the total pro-poor spending by the federal government of Pakistan Tahreek-e-Insaf increased one-fifth, its spending on education and health decreased in the previous fiscal year. Prime Minister Imran Khan’s government spent Rs125.6 billion on education, which was less by nearly Rs1.3 billion, according to the Finance Ministry.

Overall, the five governments spent Rs868 billion on education –up by Rs39 billion, mostly on paying salaries to the staff. In terms of the size of the economy, the spending on education by the five governments was equal to just 2.25% -down from the preceding year’s level of 2.4% of the GDP.

The spending on health by the federal government reduced by Rs8 billion or 23% to Rs27 billion in the previous fiscal year. But there was slightly over 1% in increase in cumulative health spending by the four provincial and the federal government. The five governments spent Rs421.8 billion on health related activities.

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Again in terms of size of the economy, the total spending on health was equal to just 1.1% -down from the preceding year’s level of 1.2% of the GDP.

There have been concerns about deterioration in the social indicators of health and education despite pumping an additional hundreds of billions of rupees into provinces under the seventh National Finance Commission Award.

As against a cut on education and health spending, the federal PTI government’s expenses on construction of roads and highways increased by almost one-third in its first year in power. This was surprising given the fact Prime Minister Imran Khan was very critical of the PML-N government’s spending on infrastructure.

The federal PTI government spent Rs316.5 billion on construction of roads, highways and bridges in fiscal year 2018-19 –up by Rs74 billion or 30.5%, according to the Finance Ministry’s figures.

Cumulatively, the four provincial and the federal government spent Rs400.7 billion on infrastructure –down by Rs51.7 billion or 11.4%, according to the Finance Ministry.

The five governments spent Rs387.2 billion on paying subsidies in the last fiscal year, up 18.4% or Rs60 billion.

There has been a constant increase in inequality and poverty and the federal government seems reluctant to come up with the exact number of people living in poverty. The PTI government has not published the latest figures of poverty and unemployment in the country. The poverty and unemployment figures are given by independent economists.

The spending on social security and welfare also went down in the last fiscal year, mainly because of 50% reduction in spending by the government of Sindh. All the five governments spent Rs65.5 billion on social security and welfare, down by Rs55 billion or 45.7%.

The five governments spent roughly Rs430 billion on maintaining law and order, up Rs40 billion or 10% from last year. The spending on agriculture went down 7.8% to Rs256.7 billion in the last fiscal year.