ajpirzada
SENIOR MEMBER
- Joined
- Mar 4, 2008
- Messages
- 6,011
- Reaction score
- 11
- Country
- Location
Budgetary Comparison (Static): Development Strategies of Punjab & KPK
The political competition between the two provincial governments (Punjab & KPK) has expectedly or unexpectedly resulted in an apparent convergence across the two budget papers. At the aggregate level there does appear to be certain differences, however, they do not stand much ground when accounting adjustments are made for a consistent comparison. The first impression is that of an uncomfortable similarity. Nonetheless, there are major priority differences at the micro level - distinctly reflecting respective party manifestos - which can only be inferred through a careful analysis of the allocations under annual development expenditure.
Table 1: The %ages have been calculated using corresponding tables (on General Revenue and Expenditure 2014-15) in both the budget documents (given at the end).
Two key adjustments are to be noted when looking at Table 1. Firstly, the apparent difference across the two provinces under the heading of General Public Services (GPS) and Education Affairs & Services (EA) is only due to how the district level education expenditure is treated. Punjab government has divided the education expense into provincial (82bn) and district level (181bn). I infer that the Punjab government has recorded all of the district level expenditure under the GPS since this is where 236bn worth of transfers are made to 'the district government.' This is contrary to the KPK who appear to have recorded the corresponding expense under the EA. Therefore, I have taken this out of the GPS and placed it under EA to ensure consistency and facilitate comparison. An identical adjustment has been made for health. 37bn of the health related district level spending is taken out of the GPS and moved under 'Health.' Secondly, the entry for Punjab under 'B' has been adjusted by eliminating the double counting (related to state trading + repayment of commercial bank loan) - in line with the KPK format.
After the aforementioned adjustments, the only difference at the aggregate level is the negligible allocation for 'social protection' by the Punjab government arguably compensated by the higher spending under health. Other than this, higher level of Development expenditure (C) in KPK is mostly due to a relatively higher proportion of foreign assistance (most of which is grants). With these points in mind, the potential difference across the two provinces can therefore only be observed in how the annual development expenditure (ADE) is allocated.
In what follows, I start with a breakdown and cross-comparison of Education and Health. I then move on to the breakdown of the annual development expenditure (ADE) which is where the respective development strategies are reflecting themselves.
1) EDUCATION & HEALTH
Note that there are two primary heads under which the sectoral expenditures fall: Current expenditure (CE) in the form of salaries etc; and, annual development expenditure (ADE). I give estimates for each of these to allow you for self-reflection.
Punjab
i) CE: Allocation of 228bn for education (20.8% of the Budget) and 91bn for health (8.3% of the Budget).
ii) ADE: Allocation of 45bn* for education (13% of total ADE and 4.1% of the Budget) and 31bn for health (9% of total ADE and 3.6% of the Budget).
*I have taken out the 2.9bn for 'Sports and Youth' from education to stay consistent with the KPK allocation.
Summary: Total allocation of 24.9% and 8.5% (of the budget) for education and health, respectively.
KPK
i) CE: Allocation of 87bn for education (21.6% of the Budget) and 21bn for health (5.2% of the Budget).
ii) ADE: Allocation of 25bn for education (18% of total ADE and 6.1% of the Budget) and 11bn for health (8% of total ADE and 2.7% of the Budget).
Summary: Total allocation of 27.7% and 7.9% (of the budget) for education and health, respectively.
2) ADE: PRIORITY BREAKDOWN
While there is little difference at the aggregate level, some significant differences can be observed in the development strategies of the two provinces:
i) One of the contributing factor (education) has already been pointed out. Education has a share of 18% in ADE for KPK whereas it is 13% for Punjab.
ii) Industry & commerce gets an allocation of 3.7% by KPK. For Punjab it is 2% of the ADE.
iii) 13.4% of the ADE in KPK is going to district/regional development. For Punjab it is only 5.3%.
iv) Water & Senitation gets 7.6% and 5% (of ADE) in KPK and Punjab, respectively.
v) Infrastructure development gets a major 43% of the ADE in Punjab. For KPK it is only 24%
a) Roads: 9.2% of ADE for Punjab; 12.4% of ADE for KPK.
b) Irrigation: 10% of ADE for Punjab; None
c) Energy: 9% of ADE for Punjab; 4% for KPK
d) Buildings: 2.3% of ADE for Punjab; 1% for KPK
e) Urban Development: 12.2% of ADE for Punjab; 6.3% for KPK
vi) For Punjab, 9.5% of the ADE is going the 'Special Initiatives.' For KPK, an almost similar heading of 'Pro-poor initiatives' has an allocation of 5.7% of the ADE. It is less clear as to what these initiatives are.
vii) Lastly, KPK also has a significant allocation of 8.9% going to 'Home' and 'Finance.' I am uncertain about their explanation.
The above breakdown (plus health) accounts for around 90% of the ADE for both the KPK and Punjab. The higher spending by Punjab under v) and vi) can explain all of the spending difference between the two provinces under i), ii), iii), iv) and vi).
CONCLUSION
The difference between the two development strategies can be adequately attributed to the varying priorities across Social Development Spending and Infrastructure Development Spending. While KPK is more focused on education and district level social spending in an attempt to directly target the middle and lower-middle class, Punjab has its emphasis on large scale infrastructure projects in both energy and road network. Which one is better? It is a subjective question. In the end what matters without any ambiguity is the institutional mechanism through which the funding is directed.
finding a Highway to HOPE: Budgetary Comparison (Static): Development Strategies of Punjab & KPK
The political competition between the two provincial governments (Punjab & KPK) has expectedly or unexpectedly resulted in an apparent convergence across the two budget papers. At the aggregate level there does appear to be certain differences, however, they do not stand much ground when accounting adjustments are made for a consistent comparison. The first impression is that of an uncomfortable similarity. Nonetheless, there are major priority differences at the micro level - distinctly reflecting respective party manifestos - which can only be inferred through a careful analysis of the allocations under annual development expenditure.
Table 1: The %ages have been calculated using corresponding tables (on General Revenue and Expenditure 2014-15) in both the budget documents (given at the end).
After the aforementioned adjustments, the only difference at the aggregate level is the negligible allocation for 'social protection' by the Punjab government arguably compensated by the higher spending under health. Other than this, higher level of Development expenditure (C) in KPK is mostly due to a relatively higher proportion of foreign assistance (most of which is grants). With these points in mind, the potential difference across the two provinces can therefore only be observed in how the annual development expenditure (ADE) is allocated.
In what follows, I start with a breakdown and cross-comparison of Education and Health. I then move on to the breakdown of the annual development expenditure (ADE) which is where the respective development strategies are reflecting themselves.
1) EDUCATION & HEALTH
Note that there are two primary heads under which the sectoral expenditures fall: Current expenditure (CE) in the form of salaries etc; and, annual development expenditure (ADE). I give estimates for each of these to allow you for self-reflection.
Punjab
i) CE: Allocation of 228bn for education (20.8% of the Budget) and 91bn for health (8.3% of the Budget).
ii) ADE: Allocation of 45bn* for education (13% of total ADE and 4.1% of the Budget) and 31bn for health (9% of total ADE and 3.6% of the Budget).
*I have taken out the 2.9bn for 'Sports and Youth' from education to stay consistent with the KPK allocation.
Summary: Total allocation of 24.9% and 8.5% (of the budget) for education and health, respectively.
KPK
i) CE: Allocation of 87bn for education (21.6% of the Budget) and 21bn for health (5.2% of the Budget).
ii) ADE: Allocation of 25bn for education (18% of total ADE and 6.1% of the Budget) and 11bn for health (8% of total ADE and 2.7% of the Budget).
Summary: Total allocation of 27.7% and 7.9% (of the budget) for education and health, respectively.
2) ADE: PRIORITY BREAKDOWN
While there is little difference at the aggregate level, some significant differences can be observed in the development strategies of the two provinces:
i) One of the contributing factor (education) has already been pointed out. Education has a share of 18% in ADE for KPK whereas it is 13% for Punjab.
ii) Industry & commerce gets an allocation of 3.7% by KPK. For Punjab it is 2% of the ADE.
iii) 13.4% of the ADE in KPK is going to district/regional development. For Punjab it is only 5.3%.
iv) Water & Senitation gets 7.6% and 5% (of ADE) in KPK and Punjab, respectively.
v) Infrastructure development gets a major 43% of the ADE in Punjab. For KPK it is only 24%
a) Roads: 9.2% of ADE for Punjab; 12.4% of ADE for KPK.
b) Irrigation: 10% of ADE for Punjab; None
c) Energy: 9% of ADE for Punjab; 4% for KPK
d) Buildings: 2.3% of ADE for Punjab; 1% for KPK
e) Urban Development: 12.2% of ADE for Punjab; 6.3% for KPK
vi) For Punjab, 9.5% of the ADE is going the 'Special Initiatives.' For KPK, an almost similar heading of 'Pro-poor initiatives' has an allocation of 5.7% of the ADE. It is less clear as to what these initiatives are.
vii) Lastly, KPK also has a significant allocation of 8.9% going to 'Home' and 'Finance.' I am uncertain about their explanation.
The above breakdown (plus health) accounts for around 90% of the ADE for both the KPK and Punjab. The higher spending by Punjab under v) and vi) can explain all of the spending difference between the two provinces under i), ii), iii), iv) and vi).
CONCLUSION
The difference between the two development strategies can be adequately attributed to the varying priorities across Social Development Spending and Infrastructure Development Spending. While KPK is more focused on education and district level social spending in an attempt to directly target the middle and lower-middle class, Punjab has its emphasis on large scale infrastructure projects in both energy and road network. Which one is better? It is a subjective question. In the end what matters without any ambiguity is the institutional mechanism through which the funding is directed.
finding a Highway to HOPE: Budgetary Comparison (Static): Development Strategies of Punjab & KPK
Attachments
Last edited:
