A large chunk of population in Pakistan is living below the poverty line. According to the Benazir Income Support Program (BISP), 45.7 percent people (Approximately 82 million) in Pakistan are living below the poverty line. And out of these 45.7 percent people 36.5 percent million (Approximately 65 million) of the total population are living in chronic poverty.
At the end of fiscal year 2010-11, the data from labour force survey shows that 3.4 million people (1.55 million in urban and 1.85 in rural areas) are unemployed in Pakistan and the data from current economic survey of Pakistan shows that till December 2011 the total number of unemployed workforce was 3.53 million, the unemployment rate was 5.95 percent in December 2011 which is same comparing with the preceding period of last fiscal year.
The current government is of the view that it will reduce the unemployment level and eradicate poverty level in Pakistan. For that purpose in the budget 2012-13, the government allocated Rs. 9.5 billions for provision of 100,000 internships to the unemployed educated youth of Pakistan under the National Internship Programme (NIP) in public as well as private sector.
This is an appreciable step by the current government, but the issue is when these 100,000 young graduates complete their internships, is there any guaranty from the current government that they will get permanent jobs? Will the next government have the capacity to adjust these 100,000 interns in different sectors?
Giving relief to the labour, on 1st May 2012 the federal government has increased minimum wage of labours in Pakistan from 7000 rupees to 8000 rupees. However, the labours considered it a joke with them, as in the current scenario one can not run the budget of any house in 8000 rupees a month.
Inflation rate is very high, the prices of basic necessities are increasing, electricity tariffs are increasing almost every month, CNG and Petroleum prices are increasing which, in turn, is resulting in the increase of transportation charges. Children’s education related expenses are also increasing due to inflation. So, in such circumstances, how can a family manage its expenses in just 8000 rupees? Does the current government have the answer to this question?
Another step to reduce the poverty level in the budget 2012-13, is an increment of 20 percent salary of government employees in the federal budget 2012-13, which is also a minor step as the government employees are demanding revision of scales with a hundred percent increase in basic salary, but the government has increased only 20 percent salary and that is just an addition in ad-hoc relief allowance. As a matter of fact, this increment along with increment in wage of labors is very low.
According to this increment, the BPS-1 employee will receive only 960 rupees per month. The government employees have rejected this increment as they are of the view that it is very difficult to manage their current expenditures in the current salary and it will remain difficult to manage with the increment as well.
The Benazir Income Support Program (BISP) which was started by the PPP government in 2008 with the primary objective of providing immediate relief to the poor. Millions of families are being paid cash assistance of Rs.1000 per month at their doorstep, the cash assistance is provided to those families that have the overall monthly income of 5000 rupees.
BISP is also running some other programmes, including Waseela-e-Rozgar, Waseela-e-Sehat and Waseela-e-taleem. Under these programmes at minor levels, people are getting the facilities of education, health and employment. In the current budget Rs. 70 billion are allocated to BISP and it is expected that till the end of this government’s tenure more families will get benefits from BISP.
The BISP is a good initiative and to some extent it is beneficial for the poor people but one should not forget the fact that in the past when the governments packed up, unfortunately, their programmes and projects also ended. Nobody knows what will be the future of BISP.
In the current budget, the overall fiscal deficit is estimated at Rs. 1105 billion, financing this huge deficit, the government will rely on internal and external sources. Talking about internal sources, Finance Minister says the government will not borrow from the State Bank of Pakistan (SBP) but experts are of the view that it is not possible that the government will not borrow from SBP.
Deficit financing will in turn increase inflation and that in turn reduce purchasing power of the people. In other words, the poverty level will increase.
On a broader level, poverty can’t be alleviated by starting programmes like BISP, or giving minor relief to the poor people of the country. Poverty can be alleviated through building efficient labour market, which can promote job creation, provision of high quality education opportunities to the youth on a permanent basis.
Unfortunately in Pakistan, policies are made on a short term basis. Resultantly, poor governance is one of the main reasons of poverty in Pakistan. Like previous budgets, the current budget is also unable to provide ample relief to the poor people of the country.
Therefore, the country needs to focus on tackling the energy crises, providing technical education, investing in long term employment generating projects, and reducing non development expenditures.
This article was originally published at: The News
The opinions expressed in this article are the author's own and do not necessarily reflect the viewpoint or stance of SDPI.