Defending the PML-N’s performance

In times of slow growth, I am delighted, Punjab government is taking in less in taxes, lessening burden on citizens.

In his article entitled “Punjab’s Economic Performance”, published on September 13, Dr Pervaiz Tahir wrote that “the record of the PML-N in government in Punjab creates doubts about the future promises being made by the PML-N in opposition”. He concludes that based primarily on just two economic statistics out of so many he could have used.

First, his assessment of slower growth in Punjab of 2.5 per cent compared with the growth in Pakistan of 2.9 per cent from July 2006 to June 2010, ie, the last two years of General (retd) Pervez Musharraf’s regime and the first two years of the PML-N’s government, is not fair. If you want to judge the PML-N’s record, you should only use statistics during the PML-N and Chief Minister Shahbaz Sharif’s stewardship of Punjab and not club them with earlier performance. It is very likely that the growth in Punjab during Mr Sharif’s tenure is relatively higher than earlier. But even if we accept the argument that growth in Punjab during the PML-N’s stewardship has been slower than Pakistan’s GDP growth, to suggest that this is due to a lack of effort by the government under very trying circumstances is both counterfactual and misleading.

The major reason Punjab may be growing slower than the rest of Pakistan is that the industrial units of Punjab that run on gas were shut down for over 160 days last year. And remember, the SSGC, the SNGPL and Ogra are federal entities and the Government of Punjab has no say in gas production, pricing or distribution.

Electricity loadshedding is also worse in Punjab compared with the rest of Pakistan and it, too, affects industrial and agricultural output — and thus, growth and employment. The federal government owns the national electric grid and all electricity distribution and generation companies so Punjab cannot offer any grid-based solution. But for off-grid power, Punjab has been the most innovative and we are encouraging the generation of small-scale off-grid power based on coal, biomass, biogas and solar energy. We have begun setting up dedicated power plants for our industrial estates, giving away free solar panels and lights to the poor and are studying the possibility of giving steep subsidies to farmers to encourage them to develop biogas power and shift to drip irrigation to conserve both water and electricity.

The second major point Dr Tahir makes against the performance of the Punjab government under the PML-N is that its revenues declined from Rs99 billion in 2008-09 to about Rs70 billion in 2010-11 and that the Punjab government’s budget was in surplus in 2010-11 only because of the greater inflows after the NFC award. The NFC award that is coming to us from the federal government, on a per capita basis, is coming from taxes we Pakistanis pay. If through those taxes that are returning to Punjab and with some further revenues from our own resources, we can balance the budget, then why would we tax our citizens and businesses more? In a time of slow economic growth, I am delighted, both as a businessman and as the head of Punjab’s investment promotion agency, that our provincial government is taking in less in taxes and lessening the burden on our citizens. Make no mistake: this is a deliberate policy. We want industrial, commercial, educational, housing and agricultural capacity to grow first. And we want the government to be as small a burden on the taxpayer as possible.

Published in The Express Tribune, September 21^st, 2012.