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1- FOREIGN DEBT
2- IMF MISSION IN PAKISTAN
3- FALAHI PROGRAMME
4- INFRASTRUCTURE TO FACILITATE E-COMMERCE
5- ROAD/MAP FOR CONSOLIDATION OF PRIVATISED BANKS

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FALAHI PROGRAMME

 

The scheme is also extremely limited in scope as financial assistance will only benefit a very small numbers of people in a country

 

By Syed M. Aslam
Jan 27 - Feb 02, 2003 
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The federal cabinet approved a support plan for the poor on the 18th of this month. Just how ill-conceived was the programme is evident from the fact that even the figures just don't match- you don't have to be a genius to calculate that Rs 2,500 financial assistance to 2.5 million families a year totals Rs 6.25 billion and not Rs 5 billion as announced by the federal information minister Shaikh Rasheed and Prime Minister's advisor on Finance Shaukat Aziz jointly.

The plan patronizingly called 'Prime Minister's Falahi (Welfare) Programme' seems to be driven more by political expediency than human compassion on the part of the top policy makers. In fact, it has been a great disappointment bordering on insulting the intelligence of the people as Rs 2,500 disbursed over a period of a year translates into just over Rs 200 a month. Two hundred rupees, as we all know, can hardly buy 20 kilos of wheat flour and just about 4 kilos of cheapest shortening available in the market.

The Rs 5 billion package did make a good press to help the government extract an immense political mileage but Rs 7 a day financial assistance not make any difference to 2.5 million families, the intended beneficiaries. Just imagine stretching $ 3.50 over 30 days amidst incessant increase in essentials, forget about cost of living, for yourselves.

Instead of wasting precious governmental funds, energies and time to altogether suppress or mitigate the truth about drastic increase in poverty the policy makers should be better off to tackle the problem head-on. It is not that the government itself is unaware of the limitations of the programme evident from federal Information Minister Shaikh Rashid Ahmad's pre-emptive comment at the press briefing at which he announced the scheme, "It is better to give the poors something than not to give them anything at all." That may be right but what can justify the decision by the Punjab Government to lavishly spend 60 brand new cars at Rs 1.2 million a piece costing the exchequers a cool Rs 72 million so that ministers and other elected representatives of this poor nation can travel in style.

 

 

The scheme is also extremely limited in scope as financial assistance, meaningless as it is, will only benefit a very small numbers of people in a country where 35-40 per cent of the population is living in absolute poverty. It will only provide negligible assistance to only 2.5 million families, or 15 million people as Mr. Ahmad and Mr. Aziz had proudly pointed out at the briefing, in a country reeking from grave economic inequalities. In a country where half or 72 million of the population in poverty, around or over 40 million of them living in sub-human conditions.

The scheme is thus extremely limited in scope to alleviate poverty or to even lessen its blow. A financial assistance of $ 3.50 cannot even buy enough wheat flour to feed a family of six for a month, as the information minister and finance advisor had so diligently calculated to highlight the magnitude of the scheme.

The scheme is a typically Pakistani way to shut up the 'cynics' who have been expecting that the re-dawn of democracy in the country should benefit the common man. In last three years the prices of petroleum, utilities and essentials have risen substantially to a point where even the rupee has shed substantial purchasing power. The pattern of income distribution and tax have become even more inequitable over the years.

According to Pakistan Human conditions Report 2002 published by Centre for Research on Poverty Reduction and Income Distribution 20 per cent of the rich are sharing 50 per cent of the income while 20 per cent of poor at the bottom of the rung were getting just 6 per cent of the income in Pakistan.

Not only the rich have registered a significant increase in their income but they are also paying lesser taxes than the poor. The tax burden tilts heavily in favour of the rich while the poor are burdened with higher taxation. The tax burden has registered an increase of 4 per cent for the lowest income group while it has magnanimously registered a sharp decline of 21 per cent for the high income segment of the society. The situation has become worsened by the withdrawal of subsidies on such essentials as wheat flour and power due to IMF conditionalities.

 

 

The unjust income distribution and the inequitable taxation have immensely burdened the middle and low-income groups while it has provided an undue relief for those who don't really deserve it. The most terrifying aspect of the indicators is that it proves that the rich have benefited at the cost of the poor.

The incidence of poverty has reached an epidemic level in Pakistan and thus can hardly be solved by half-baked schemes such as the one announced with a fanfare recently. Poverty can hardly be alleviated through such meager financial handouts. It requires serious plans to make the income distribution and taxation more equity and by creating new jobs. Cutting the heavy administrative expenses and culture of unnatural opulence at the cost of the poor would also help.