PUNJAB’S Rs932bn budget for the next fiscal must increase the province’s regional economy as the Shahbaz Sharif government has substantially raised investment spending and attempted to raise provincial tax revenues through additional measures. At the same time, however, it focuses on populist schemes to woo the youth — perhaps with a view to luring them away from Imran Khan’s PTI — and dishes out massive subsidies in the name of the poor. The larger budgetary objective to raise growth through infrastructure spending and an increase in provincial revenues is commendable, but there still is room to review the policy of continuing populist schemes and giving subsidies. First things first. The keepers of the provincial exchequer should do away with the wheat support price subsidy, which is an unnecessary burden on the provincial finances and will be pocketed by the flour millers and large commercial consumers. Next year this subsidy is estimated to cost taxpayers a whopping Rs28bn. The better way of supporting the poor is to directly put cash into their pockets.

The government also needs to reassess some new taxation measures to make them more effective and equitable. For example, the changes in agriculture income tax also nets farm income of below Rs0.4m, the threshold of income tax exemption. Similarly, widowed owners of 2-4 kanal houses have been exempted from payment of the new one-time levy of luxury tax on houses measuring two kanals and above in posh localities. But the property tax exemption for the same category of owners of five-marla residences has been withdrawn. These examples underline the need to make provincial taxation equitable.

With the election over and behind us, the ruling party is now expected to implement stringent fiscal discipline for higher investment spending to help industry and agriculture grow and become competitive internationally and improve service delivery in the social sector. The resources being squandered on populist schemes like distribution of free laptops for drawing political mileage should be diverted to productive sectors for creating jobs. The post-18th Amendment responsibilities of the provinces have created a louder demand for quality healthcare, education, water supply and sanitation, etc from them. Punjab should lead the way on this count. At stake is the ruling PML-N’s claim that its mandate to govern at the centre and in Punjab is based on its economic performance in the province in the last five years. With the party also ruling at the centre, the PML-N would have no one but itself to blame for what it couldn’t do in the province in the next election.