Survey silent on missed education targets

ISLAMABAD: In what could be a serious charge sheet against the federal and provincial governments, the Pakistan Economic Survey 2013-14 has conveniently missed out to the 2009 National Education Policy commitment of spending 7% of the GDP on education by 2015.

Not only that, the Economic Survey 2013-14 conveniently misses to mention the 2009 National Education Policy (NEP) pledge of allocating 7% of the GDP on education by 2015 it re-sets the target of spending 4% of the GDP on education by 2018 from the existing 2%.

Last year’s Economic Survey had at least mentioned the NEP 2009’s commitment of allocating 7% of GDP to education by 2015. This year the Survey report does not talk of what was committed in 2009.

The 2013-14 Survey report instead reflects on the government’s commitment to gradually increase the allocation to education from the present 2% to 4% of GDP by 2018. It means the federal as well as all the provincial government have terribly failed to do what they had committed and set for the education sector in 2009 National Education Policy.

In the 2012-13 Economic Survey report, the salient features of the NEP were included. Some of which include free and universal education by 2015 and up to class 10 by 2025; allocate 7% of GDP to education by 2015; and increase of literacy up to 86% by 2015. None of these objectives are any more possible but still there is no accountability of any government, minister, official or authority for this serious failure.

Ignoring the past failures, now the present Economic Survey talks about the “Vision 2015 on Education” which at present is in draft stage. The report says, “According to policy guidelines given in

(Draft) Vision 2025 for Pakistan; aims at substantial expansion in access to education as well as making significant improvements in quality education. Pakistan ranks 113th out of 120 countries in the UNESCO’s Education for All Education Development Index. Pakistan’s literacy rate (60) percent lags well behind the country’s neighbours.

According to UNESCO’s Education For All (EFA) Global Monitoring report 2013, Pakistan has almost 5.5 million out-of-school children, the second highest number in the world after Nigeria. There is a high dropout rate at the primary, secondary and tertiary level. Annual expenditure is very low as hardly 2.0 percent of its GDP is spent on education.

A high proportion of this allocation is spent on salaries and other administrative expenses, leaving a small amount for betterment of education. The quality of education is a serious challenge; poorly qualified and untrained teachers, irrelevant curriculum, non-availability of textbooks, shortage of other learning materials, insufficient space due to which learning levels are low and teachers’ absenteeism are the main issues.”

The report promises, “According to (Draft) Vision 2025, development of a society in which every child, youth and adult must have access to quality education without discrimination. Provinces will lead to education development with active support from the federal government. The provincial governments showed their commitment to increase their education budget spending. Curriculum reform and modernised teaching methods will improve the quality of education. Quality of teaching in public schools will be improved by providing capacity building training arrangements; accreditation and certification procedure of the institutions should be standardised and institutionalised. The significance of the curriculum will be improved to reduce the dropout rate and special effort will be made to increase the enrollments of girls by providing special incentives, protection and as well as to reduce dropouts.”

A budget based on foreign funds, ambitious targets

 

ISLAMABAD: The Nawaz Sharif government is going to present a Rs3.9 trillion federal budget for 2014-15 on Tuesday, which is based on foreign inflows and an ambitious revenue target of Rs2.8 trillion.
A source close to the finance minister said the budget would be of 3.9 trillion rupees.The revenue generation will depend mainly on withdrawal of many SROs, tax exemptions and over Rs530 billion new taxes and administrative measures.

The tight budget deficit target of 4.8 percent will not provide the government enough fiscal space to stimulate the economy and achieve the GDP growth target of 5.1 percent.of SROs, so that the industrial growth could not be impacted.

For the common man and the poor, the federal budgets in Pakistan have now become irrelevant as oil, gas and electricity prices, which have instant impact on inflation and kitchen items, have been linked to international prices and are regulated by the regulatory authorities.

However, one thing in every budget affects the masses and that is the increasing incidence of indirect taxation.And according to the vibes emanating from the corridors of power for the coming budget, the volume of indirect taxation is also feared to further increase, thereby, making the lives of masses more miserable as the government is not inclined to take solid steps to increase the volume of direct taxes.

This time the government will have to spend a mammoth amount of Rs1.347 trillion on debt servicing alone.The government has decided to come up with the defence budget of over Rs700 billion, which is feared to increase keeping in view the developments taking place in neighbouring countries.

The federal government, which will this time give a hefty amount Rs1.73 trillion to provincial governments from the divisible pool under the NFC Award, should seek financial share from the federating units to cope with the expected increase in defence expenditure as all the provinces are bordering units.

Under the expenditure side, the government is likely to allocate Rs215 billion for pensions and Rs285 billion for the federal government employees. The government has incredibly reduced the subsidies to Rs229 billion, meaning that power tariff will increase and masses will not be able to get solace in the next budgetary year.

But in view of the expected campaign by the main political parties against the government, which may gain momentum after the holy month of Ramazan, the government will be left with no option but to increase the subsidy to appease the masses.

So the exercise to drastically cut the subsidy may end up going nowhere. The government has also decided not to allocate any amount in the next budgetary year to cope with the circular debt. This shows that the government will not spare any one who will be responsible for the emergence of the circular debt, but what about the current circular debt that has increased to Rs350 billion.

Coming to the uphill task of revenue target of Rs2.8 trillion, the government seems to be trapped under the NFC Award.

The previous governments, including the Nawaz government, have never achieved any revenue target so far and this year the sitting government has revised downward its revenue target for the outgoing financial year and has reportedly halted Rs100 billion refunds of many business establishments just to perk up the stats.

However, the target for the next budgetary year is Rs2.8 trillion and independent economists are of the view that the government even with utmost efforts will be able to collect not more than Rs2.6 trillion.

The government has already approved a whopping Rs1.310 trillion development budget for 2014-15 against Rs1.150 trillion allocated for the current financial year. Out of Rs1.150 trillion, about Rs660 billion is likely to be spent by the end of the current fiscal. The provinces could not spend on their development schemes mainly because of their inability to spend and late release of funds.

On top of that when an ambitious development budget is announced, the slippages start appearing from that particular day owing to which the whole development budget gets compromised and the governments find it easy to cut these budgets to achieve the deficit target.The Nawaz government, in the ongoing financial year, has already slashed the development budget by Rs100 billion.

Economic growth has increased but most targets couldn’t be met

 

ISLAMABAD: Federal Minister for Finance Senator Ishaq Dar has conceded that the government has missed major economic targets of GDP growth, revenue, investment and inflation in the outgoing year.
The GDP growth remained at 4.14 percent against a target of 4.4 percent but in the last six years, this is the first time that Pakistan registered over 4 percent growth against the revised target of 3.7 percent, taking the per capita income up to $1,386 in 2013-14 from the revised target of $1,369 in 2012-13. Tax collection remained at 16 percent and inflation increased by 8.5 percent and unemployment registered an increase of 6.2 percent.

Announcing the results of the Economic Survey at a news conference, the finance minister said in the first year of its rule, the government spent its time in fire fighting and in the second financial year, which is 2014-15, the masses will be witnessing dividends of the prudent economic policies.

The minister said that he himself fixed the aggressive economic targets for 2013-14 so that the government could not remain complacent and because of hard work and good economic governance, the government had performed well in terms of achieving the GDP growth of 4.14 percent.

He vowed to increase the GDP growth by 1 percent every year and said that the size of the GDP had swelled close to $300 billion. The minister said the unemployment rate had increased to 6.2 percent from 5.9 percent from 2009-10. He stated that the impact of the war against terrorism remained at $102 billion and 50 percent of the population was living below the poverty line of $2 a day income.

“The vulnerable segments of the society will be taken care of and it was I who first proposed the Benazir Income Support Programme as target subsidy to provide solace to the poorest of the poor. The last government in five years time increased the BISP allocation from Rs34 billion to just Rs40 billion,” he said.

However, the government has increased the allocation under the Benazir Income Support Programme to Rs75 billion in the current financial year, which will be increased further in the next budgetary year. Next year, the government will provide financial help to 4,700,000 poor people.

Coming to the GDP growth analysis, the minister said that the overall industrial growth remained at 5.84 percent in the first nine months against 1.37 percent in the same period of the last year. He said the Large Scale Manufacturing (LSM) sector grew by 5.31 percent as against 4.1 percent last year.

The construction sector grew tremendously by 11.3 percent in the first nine months of the current financial year as against the negative growth of 1.7 percent in 2012-13.

Electricity generation and gas distribution sector grew by 3.72 percent against the negative growth of 16.3 percent in the last financial year. “This has really helped increase growth of the industrial sector.” He said growth in small and household sector stayed at 8.4 percent against the growth of 8.3 percent in the same sector last year.

However, the Economic Survey said during 2013-14, energy consumption was 40,185 million TOEs compared to 40,026 million TOEs in 2012-13 showing a growth of 0.4 percent. Now the industrial growth could be questioned with an increase in electricity consumption by 0.4 percent.

However, the minister admitted the agriculture sector growth remained very low at just 2.1 percent against 2.88 percent last year. However, in the next budgetary year, the government will come up with alluring incentives to increase the growth in agriculture sector.

Dar said the growth in important crops remained at 3.7 percent as against 1.2 percent last year. Other crops that included oil seeds and pulses showed negative growth at 3.5 percent as against 6.1 percent last year. He said that the country also witnessed a reduction in growth as cotton production remained at 12.77 million bales against 13.03 million bales.

The minister said that for agriculture sector, the government allocated Rs380 billion for the current year against Rs315 billion last year. Next time the government will increase the credit lines for the agriculture sector. He also mentioned that fertilisers also remained short and the government had somehow managed to provide the imported fertilisers at Rs1,786 per bag plus Rs25 of dealers margin. “We brought down the prices of fertiliser from Rs1,952 per bag to Rs1,786,” he said.

Mentioning the services sector, the minister said that this sector failed to perform up to the expectations as it grew by 4.3 percent against the growth of 4.9 percent in the last financial year.

In transport, storage and communication sector, the growth remained at 3 percent against 2.9 percent, in wholesale and retail trade 5.2 percent against 3.4 percent, finance and insurance 5.2 percent against 9 percent, housing services remained at 4 percent against 4 percent last year and growth in general government services tumbled by 2.2 percent against 11.3 percent and in other private sector, the growth stayed at 5.8 percent as against 5.2 percent.

About inflation, the minister said that during the July-April period, it remained at 8.8 percent against 7.75 percent last fiscal. However, till May this year, inflation remained at 8.6 percent as against 7.5 percent. About the core inflation which he termed very important saying it remained at 8.2 percent against 9.7 percent in 11 months of the outgoing fiscal.

The minister also said that government borrowing had reduced and the monetary policy had improved. Highlighting the exports of the country, he said that exports had increased by 4.24 percent to $21 billion in the last 10 months against $20.1 billion in thesame period last year and because of the GSP Plus, the textile sector grew by 7 percent and raw cotton export 42 percent. However, it would have been better if the value addition had been added and finished products exported instead of exporting raw cotton. However, the imports, the minister said, had increased by 1.2 percent to $37.1 billion from $36.7 billion in 2012-13. Dar mentioned the reason for the increase in exports saying that plants and machinery had been imported on a large scale, which is in a way a positive sign for growth in economy.

Investment to GDP has reduced to 13.99 percent from 14.57 percent of GDP last year. Fixed investment has also tumbled to 12.39 percent of the GDP against 12.79 percent. Out of this, the private investment remained at 8.94 percent against 9.64 percent of GDP. Dar said that total investment was recorded at Rs3,276 billion in 2012-13, which increased to Rs3,554 billion in 2013-14. The minister said that Foreign Direct Investment (FDI) had reached $2.979 billion that also included the $2 billion Euro Bond. However, in the last year in the same period it stood at $1.277 billion.

Talking about the foreign exchange reserves, the minister said that reserves had reached $13.66 billion against $11.4 billion. He mentioned in February last year, the reserves stood at just $7.5 billion out of which the central bank reserves were at $2.7 billion. Now the situation had completely changed as right now the State Bank of Pakistan reserves had reached $8.8 billion whereas the reserves of commercial banks were stagnant at $4.8 billion.The growth in remittances has slightly reduced to $12.894 billion from $13.921 billion.

EU names 15 new Ukraine crisis targets for sanctions

BRUSSELS: The European Union has released the names of 15 new targets of sanctions because of their roles in the Ukraine crisis.

The list released Tuesday includes Gen. Valery Gerasimov, chief of the Russian General Staff, and Lt. Gen. Igor Sergun, identified as head of GRU, the Russian military intelligence agency.

Russian Deputy Prime Minister Dmitry Kozak and pro-Russian separatist leaders in Crimea and the eastern Ukrainian cities of Lugansk and Donetsk were also on the list.