SDPI proposes to improve Punjab Growth Strategy

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Press Release: Deliberating on the draft “Punjab Growth Strategy,” Sustainable Development Policy Institute (SDPI) has proposed a mechanism for long-term investments, alignment of trade related goals with Strategic Trade Policy Framework, a two-pronged strategy to overcome unemployment among the youth, improvement in city-specific zoning laws to promote construction and services sectors, and provincial resource mobilization reforms.


In a letter addressed to the Punjab Chief Minister Mian Mohammad Shahbaz Sharif, SDPI Executive Director Dr Abid Qaiyum Suleri has taken down the Institutes recommendations in connection with improvement in growth strategy. Some of the recommendations are as follows:


· A detailed framework is required for the security of assets and human resources in private sector, therefore, SDPI proposes a mechanism of deferred sovereign guarantee, which may be offered to the private sector willing to invest over 10-15 year horizon.


· The provincial government, on the occasion of next SAARC summit being held in February 2016, may align its trade-related goals (in growth strategy document) with the Strategic Trade Policy Framework being undertaken at the Federal Ministry of Commerce.


· The growth strategy should focus on improving city-specific zoning laws, amending building regulations to promote growth in construction and services sectors, and introducing building codes for energy conservation and disaster-prone construction.


· There is a need to increase the quantity and quality of available opportunities in vocational and skills training. Similarly banking sector may be asked to increase micro credit in agriculture extension and services sectors. Investment in the farm sector will also help improve the food security situation.


· A province-specific policy and subsequent reform programme should be devised for transport, trucking, wholesale and retail trade sectors to link the province with regional value chains.


– In order to make housing affordable and environment-friendly, it is proposed that provincial GST on services related to this sector may be slashed downwards. We also recommend vertical construction to make the best use of available land and to provide low cost housing.


· Punjab Growth Strategy should also focus on provincial resource mobilization reforms. The urban property tax needs immediate reform. There are issues related to: i) valuation (owner-sellers undervalue their property on official documents), ii) lack of motivation / incentive at revenue authorities to improve collections, iii) exemptions (e.g. preferential treatment allowed to owner-occupied property), and d) poor coverage (over half of urban property in each province goes untaxed).


· The Punjab Bureau of Statistics (in order to support collection of GST on services) should conduct a census of services incomes and establishments.


The letter further mentions that as part of its pre-budget proposals, SDPI has already made the following recommendations:


· On education sector, we recommend rationalization between, primary, secondary and tertiary education spendings across all provinces, rationalization of the budget allocation between physical infrastructure (capital expenditure) and teacher capacity building (human development), and the protection to development budget on education by pass a law, which may ensure that during any fiscal year the allocation for education will not be diverted elsewhere.


· On health sector, we recommend that the customs duty on the import of pharmaceutical items, which are not produced in Pakistan, should be lowered. This particularly applies to life-saving drugs and child vaccines, which are widely missing from local markets. On parallel basis generics, which can produce good quality medicines at affordable prices, should be encouraged. Punjab health department may set up a body to accredit generic companies that meet certain standards to ensure quality.


· The development budget on health should also be given protection by law. The provincial government may pass a law, which ensures that during any fiscal year the allocation for health will not be diverted elsewhere.


· At provincial level, future financial resource can be saved if there is an enhanced focus on primary preventive health care through the allocation of more funds for primary care (at BHU level), mother and child health care, family planning, and immunization. Enhanced funding is required to ensure security of polio teams in rural areas.


“We also believe that Punjab Growth Strategy should focus more on promoting womens economic empowerment,” the letter adds, and suggests that:


· Womens access to financial assistance for business needs to be radically improved. Better targeting mechanisms need to be devised to reach a maximum number of potential entrepreneurs and at the same time help micro-level entrepreneurs towards up-scaling of their operations.


· A collaborative effort between private and public sector is required to improve marketing of their products both within the country (particularly in large cities) and out of the country. The already established women entrepreneurs should be supported in becoming part of the regional value chains. Their integration with regional retail outlets such as Seven-Eleven, METRO and MACRO is also important.


· Women SMEs need to be provided training for better business planning and management, this may be done through establishing a free help-line that may advice women entrepreneurs on starting, registering, managing and scaling up their businesses along with facilitating them in terms of preparing business plans and essential documentation for obtaining loans from banks.


· Women entrepreneurs security related concerns should be addressed through stringent legislative measures that may provide a conducive and safer working environment for businesswomen.


· PandDD and TDAP need to engage with women in order to enhance understanding of gender-specific trade barriers (especially in South Asia).


· Punjab Growth Strategy may also incorporate a focus on how best it can help implement the Federal Power Policy. We see three entry points, i.e. a) introduce a plan to improve electricity and gas bills collection, b) reduce incidence of power and gas theft, and c) introduce a plan to reduce province specific duties and regulatory burden on green technologies in energy sector.


· On climate change and environmental protection, PandDD should propose an increase in allocations for projects related to climate change adaptation, disaster risk reduction and environmental protection. A rigorous implementation of carbon tax is proposed.


· On improving food security in the Punjab, the strategy may focus on the implementation of crop and livestock insurance programme, exemption from GST for agricultural inputs used by farmers (under an established output threshold), and implementation of zero hunger programme.


SDPI urges that implementing these strategies could effectively impart a positive impact on Punjab`s growth.


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