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service
KESC:
Facts vs myths
The
local level
Are
big dams the solution?
research
Uneven
tax ratio
Reforms, now! Only a meaningful civil service reforms can improve By Raza
Rumi Pakistan’s
inability to provide security and justice to its citizens; and deliver
basic services is a common theme in our political discourse. Political
parties, which are in power, make tall claims of doing this and that but
in effect their reliance on a state apparatus which is unable to deliver
is a known reality. During the last four years, other than taking very
cosmetic steps the way our executive branch of the state is organised has
remained unchanged. Whereas a beginning has
been made to shift the power from centre to provinces, the provincial
administrations continue to work according to structures that were
established nearly 160 years ago. Much has been said and written about a
long pending civil service reform but nothing has been achieved except the
partial reform in the 1970s. Pakistan is a populous
country now and its problems have grown manifold in the past few decades.
Yet the inability of the state to respond to the challenges is
spectacular. Also, the word ‘reform’ is a joke now for every time it
is mentioned the transformationists make fun of it and the agents of the
status quo start citing the failed experiments of the past. What impedes reform
then? Working on various projects with federal and provincial government
departments and agencies teaches you that structures are overwhelming when
it comes to arguing for even minor changes. Without a holistic
policy framework and political will ‘change’ as most donor assisted
projects argue is not easy to achieve. We also hear of the clichéd,
oft-cited lack of ‘political will’ when it comes to reform. The
Pakistani parliament by enacting 18th, 19th and 20th
amendments has shown the way ahead. A political consensus on reform
is vital for it to be implementable and meaningful. The consensus in the
Pakistani context would imply compacts between the political and the
technocratic, among federal and provincial, and more often than not,
between civil and military branches of the state. Of late, the reformist
solutions require some sort of judicial endorsement as well. What is clear
is that there are no short-cut solutions and no alternatives to political
engagement in the reform process. The failures of Ayub and Musharraf led
reforms to the civil service are cases worth citing here. In both cases, the
military regimes tried to devolve power to an extent and tried to contain
democracy at national levels leading to absence of political consensus.
Musharraf’s local government system vanished within months of his
departure from the scene. Given these constraints,
there is an urgent need for the political parties to reflect on this
serious dilemma. The way federal and provincial secretariats function is
antiquated and inefficient. The Police is being managed through a
nineteenth century law and the court procedures also follow at least a
century old set of rules. Assuming that Pakistani democracy is now an
irreversible reality, how will the political parties deliver the goods
without thinking of such reforms? Even the Pakistan
Tehreek-e-Insaaf which has captured the imagination of young men and women
who are disappointed with the ‘old’ players, has regurgitated lots of
rhetoric and promises made earlier with little policy input on a wider
restructuring of the government. At the same time, the
media which uses a simplistic and populist line of commentary fails to
generate the kind of debates we need. For instance, what sort of court
systems will work better? What is the extent of local government functions
and their revenue generating power? Should we retain huge secretariats and After the devolution of
certain mandates and functions in 2011, it was expected that the
provincial governments would rearrange their administrative structures.
Little progress has been noted other than one of two provinces. Khyber-Pakhtunkhwa
and Punjab provinces have made some changes and formed multiple committees
to look into the matter. This is a classic
opportunity for the political parties to set into practice structures that
will be facilitative for the democratic process and will help establish
more responsive governance. In the recent years, I
was part of a research team, which looked at the resizing of the
provincial secretariat in the Punjab province. The key recommendation was
that nearly three-dozen departments could be reduced by at least one third
by removing duplication and several entities (companies and boards set up
by the government) could be streamlined and merged to gain efficiency and
achieve better coordination. Luckily, the Punjab
government was embarking on a process of reshaping and it did merge a few
departments but the full scope of a restructuring could not be achieved. The research also
recommended that a full-scale justice department was needed to oversee
prosecution, issues relating to the provincial judiciary, and legislation.
Similarly, a land management department or authority was required which
could replace the colonial land administration and modernize its
functions. Several such studies and recommendations are available should
the political parties need to consult them. Across Pakistan, the
Rules of Business, which drive government operations, are obsolete or
ineffective. They have to be realigned as well.
The devolution of powers to the provinces and future local
governments will not work if such structural changes are not made and the
top-heavy provincial administrations are not shaken up. In many provinces for
instance, social protection functions are dispersed between zakat, labour,
education and social welfare departments. Once the Benazir Income Support
Programme and Bait-ul-Maal are added to this list it becomes even more
complex. In this situation it is difficult to track who receives what from
the government and whether there is minimum level of duplication. At the central level, it
is unclear if the federation will reform the huge structures of federal
civil services and devolve management to the provinces. Without this
particular step, full devolution of powers will not be achieved. The
provinces manage their own cadres, which have historically felt
subservient to the federal and more powerful civil service cadres. There
is much to be done if we need to make the public servants more accountable
and effective. And there is little progress in this direction. As I have written
earlier, obviously with little impact, the proposals culled by the
commission headed by Dr Ishrat Hussain are the most recent efforts at
research. The creation of national and provincial executive services is a
feasible and much needed idea. Opening up senior
positions to private sector and other technical experts will also ensure
that there is better capacity within the civil service. The well-known
complaint of too many generalists in the government can also be handled
through such a strategy. The political parties
are gearing for a general election in the next six months or so. They are
also working on their manifestoes and this would be a good time if their
leaders and policy wonks would look at the earlier reports on civil
service reform and make some use of them. The media must also play
its due role. Instead of looking at the sensational failures or gaps in
delivery of government services, it might attempt to highlight the
structural and organisational issues within the civil service and
government operations. There are long-standing
issues of pays and pensions, of government land and diminishing internal
accountability. Within the ambit of public services, police and
prosecution reform is of immense importance. All provinces are
grappling with insurgencies, worsening law and order and daily reports of
under-performance and corruption. As people’s representatives, it is
imperative that politicians take charge of this situation instead of
another messiah proposing a technocratic reform-model, thus undoing all
that has been achieved in the past few years. Without a meaningful
civil service reform, state capacity cannot improve in the dire
circumstances that we face today. Raza Rumi’s writings
are archived at www.razarumi.com
competition “Our work is
not easy; it is complicated, challenging and demanding. It requires that
the ECP is in a state of preparedness on a permanent basis”— Justice (retd)
Fakhruddin G. Ibrahim, Chief Election Commissioner. Selection of Justice (retd)
Fakhruddin G. Ebrahim as Chief Election Commissioner, by consensus this
July, rekindled the hope of having an independent and effective
institution to ensure fair and free elections vital for the democratic
process. On assumption of charge, the new Chief observed that “Strategic
Plan (2010-2014) will help us manage our activities for improved service
delivery and more efficient use of resources. I congratulate the
officers and the staff of the Election Commission of Pakistan (ECP) who
have worked with great commitment to develop this Plan. I am confident
that the Strategic Plan will be implemented in its true spirit — leading
to a stronger Election Commission that is capable of effectively serving
the people of Pakistan and is contributing towards the fostering of
democratic values and norms”. The immediate concern of
Pakistani voters is, however, not the five-year plan that has two more
years to go, but perpetual and blatant non-compliance of laws and rules by
the political parties: non-holding of elections, non-preparation and
publication of audited accounts, non-filing of tax returns, non-disclosure
of names of donors well as non-submission of details with evidence of
expenditures. Every citizen has a right to ask what has been done by ECP
for the enforcement of existing laws. Enacting laws is not our problem —
we have over ten thousand federal statutes alone — the real problem is
their enforcement and compliance. ECP must take note of the following: Political parties and
politicians in Pakistan under the law are required to file annual accounts
and declarations of assets and liabilities. Rule 4 of the Political
Parties Rules, 2002 says that “every political party shall maintain its
accounts in the manner set-out in Form-I indicating its income and
expenditure, sources of funds, assets and liabilities and shall, within
sixty days from the close of each financial year (July-June), submit to
the Election Commission a consolidated statement of accounts of the party
audited by a Chartered Accountant, accompanied by a certificate, duly
signed by the party leader to the effect that no funds from any source
prohibited under the Order were received by the party and that the
statement contains an accurate financial position of the party”. How many political
parties have displayed accounts submitted under Rule 4 of the Political
Parties Rules, 2002 on their websites? It is the duty of ECP to enforce
strict compliance of this rule so that party workers, media people, civil
society, donors and above all, voters, know about transparency in
financial matters of political parties.
Section 42A of the
Representation of People Act, 1976 and section 25A of the Senate
(Election) Act, 1975 make it mandatory for the elected representatives to
file in the prescribed manner details of their assets and liabilities on
the closing date of each financial year, failure to fulfill this
obligation leads to disqualification. Pakistan Institute of Legislative
Development and Transparency (PILDAT) has published a comprehensive report
about these legal provisions and their compliance (http://www.transparency.org.pk/jlc/mna/report_2010.pdf).
It is well-established
that there are gross violations of these laws by elected members. The
Election Commission on October 21, 2011 suspended as many as 222 lawmakers
for failing to submit details of their assets till the submission of
statements of assets and liabilities—this was reflective of apathy
towards laws and rules on massive scale by those who claim to be elected
representatives of people. It is a matter of record
that political parties in Pakistan do not file tax returns and Federal
Board of Revenue (FBR) has never bothered to issue them notices. In India,
there is a mandatory provision of law [section 13A of Income Tax Act,
1961] requiring political parties to file returns. Recently, the Chief
Election Commissioner of India asked the Indian Central Board of Direct
Taxes (CBDT) to scrutinize accounts submitted by political parties.
Earlier, the Central Information Commission of India directed Income Tax
Department to disclose in public interest, details of donors given by
political parties in their tax returns. With this information in public
domain, the Commission said, there would be transparency in the funding of
both small and big parties, besides checking the flow of black money in
the electoral process. In Pakistan, neither ECP nor FBR has bothered to
consider this vital matter. Another glaring
non-compliance is that of section 116 of Income Tax Ordinance, 2001
requiring filing of wealth statements and declaration of personal expenses
in the prescribed manner for all individuals having income of Rs. 500,000
or more [from tax year 2012 it is enhanced to rupees one million]. It
means that all persons holding public offices having this threshold of
income should have filed wealth statements conforming to their declaration
of assets and liabilities filed under the election laws. FBR in a recent
report conceded that majority of elected representatives did not comply
with section 116 of the Income Tax Ordinance, 2001. It is high time to make
filing of tax returns mandatory for all registered political parties,
which should be scrutinized and made public with any citizen having the
right to question their veracity. Donations received by parties should
qualify for tax credits as they, being non-profit organizations all over
the world, are considered as entities working for public purposes. In
Pakistan we have not yet promoted the idea that political parties should
be exemplary non-profit organizations fully committed to further the cause
of public consciousness and welfare on all matters related to governance. This idea is important
from many perspectives. Once people associate themselves with a particular
party having clear objectives and aims, they also extend financial support
for their achievement. This eliminates the influence of undesirable
“financiers”—people with money power taking control of parties for
personal gains. Meaningful participation of masses in democracy and
electoral process can only be ensured if they have the right to question
their leaders about use of their money. This would also make the party a
responsible and accountable entity when in power. The starting point of
across the board accountability in Pakistan should be scrutinizing of
declaration of assets, liabilities and taxes paid by politicians,
high-ranking civil and military officials and judges. The civil society
and media should come forward to force the parliament to abolish all laws
relating to secrecy and/or immunity and enact a comprehensive legislation
for obtaining information by any citizen under Freedom of Information Law.
The issue of accountability should not be confined to public disclosures
of assets by politicians alone. It should be extended to judges, generals
and civil servants as well—disclosures also include information about
the assets of close relatives and dependents and affidavits that no asset
has been kept as benami (name-lender). Resistance against
establishment of an independent accountability authority is due to the
fact that the ruling trio — military-bureaucratic complex,
businessmen-cum-politicians and landed aristocracy — know that any such
body would expose their corruption. The way forward is that political
parties should not only keep proper accounts and get them audited by
reputed firms, but also file income tax returns, which should be made
public. It would force them to take into their folds only those people who
honestly discharge their tax obligations. The process of filtration within
the parties is a necessary step towards a transparent and democratic setup
and ECP under Mr. Fakhruddin G. Ebrahim should prioritise it in its reform
process. The writers, tax
lawyers, are Adjunct Professors at Lahore University of Management
Sciences (LUMS)
KESC:
Facts vs myths By Amin ur
Rahman The study report
by the think tank, Sustainable Development Policy Institute (SDPI) about
Karachi Electric Supply Company (KESC) has surfaced again, mostly
repeating the oft-answered questions. Before venturing to reply to the
allegations made in the report, one needs to recall a few realities that
would lay the foundation of the idea as to what the privatised KESC has
actually achieved ever since its takeover by the current management team. Over the past four
years, KESC has injected well over USD 1 billion in shape of debt and
equity, which is a commendable feat in terms of incoming investment in
Pakistan. IFC, ADB, OeKB, and local and foreign banks have shown
confidence in KESC’s management and provided funding for many completed
and on-going projects. It was due to this huge
and unprecedented investment that KESC was able to add fresh generation
capacity of 1,000 Megawatts in a short span of time, overhaul old plants
and lay down new transmission lines, significantly enhance the
distribution capacity and considerably improve its technical and service
capability. Of this 1,000 MW capacity addition, 560MW is via the latest,
state of the art addition to KESC’s generation fleet — Bin Qasim 2 (BQPS
2), which is a combined cycle power plant — comparable to any combined
cycle plant of its class in the world in terms of efficiency. In the previously
published research article, a reference was made to the oft stated “high
subsidy” granted to KESC. It would be pertinent to mention here that
this misconstrued term only creates more confusion than clarification, by
those who tend to use it without even understanding it. ‘Power subsidy’ is
actually a pass through item, which is in effect the cost borne by the
government on behalf of the consumers; meant only to subsidise the end
user tariff. Hence, power subsidies are not any incremental or
‘super-profits’ for the power companies as often projected by the
learned researchers and analysts. Due to the adverse power
generation fuel-mix, tilting more towards the expensive furnace oil as gas
allocation for power sector has gone down drastically over the last 3-4
years. The government chooses to bear a certain portion of the total
generation cost, in order to provide the debatable relief to the average
consumer; which is in effect called the ‘subsidy’ which in simple
terms is, ‘by the government and for the consumers’. The fact of the matter
is that the tariff of KESC is adjusted quarterly, taking into account the
fuel and power purchase cost variation over the reference price. However,
it is the government that notifies the consumer end tariff, which remains
lesser than the determined tariff, providing relief to consumers as
‘tariff differential subsidy’ for each category of consumers. KESC is dependent on
SSGC for supply of gas in line with commitments made, i.e. 276MMCFD for
its existing plants and 130MMCFD for the new 560 MW Bin Qasim 2 plant,
however, the average supply has been 60 percent less than that. This gas
supply shortage, forces KESC to use the almost 4 times more expensive
furnace oil for its power generation. This also means that gas
fired plants that have been installed during recent years remain idle at
times due to insufficient gas supply. The price of Furnace Oil (FO) has
seen 90 percent increase over the past three years while gas price has
registered 52 percent increase in the same period. The average consumer
end tariff Rs.6.59 per kWh in October 2008 has risen to Rs.8.77 per kWh in
May 2011 i.e. a corresponding increase of 33 per cent only, versus the 90
percent increase in FO price and 52 percent increase in gas price. KESC operates its system
with its own generating stations in which 04 out of 05 operational
stations were installed in the post privatization period. The previous
research article published, in The News last week, the efficiencies quoted
for Uch, Orient and Saif were based upon LHV whereas the number quoted for
KESC were on HHV basis, hence evidently not an apple to apple comparison. The cost of fuel to
generate a unit in these stated IPPs, may be lower but, unfortunately, the
capacity payments built into the tariff, more than off-set the lower cost
of fuel. The efficiency of KESC’s BQPS-II 560MW combined cycle power
station and the KCCPP (in a combined cycle operation) is 7.45 cft/kWh (LHV)
which is comparable to the best, reference to combined cycle efficiency
benchmarks. The design efficiency of
the BQPS units on HFO is around 38 per cent on HHV (223gms/kWh), which is
the best efficiencies that any thermal power station could have at the
time of its installation. The global standard quoted by some analysts,
questioners and supposed researchers as being 10 kg of oil per 100 units
generated actually corresponds to an efficiency of 84.6% on HHV. This
figure by itself is quite surprising, coming from any analyst, because no
fossil fuel plant in the world has been conceived with such a high
efficiency. More importantly to note
over here is the fact that under the current management of KESC, there has
been a noteworthy ’14 percent Efficiency Gain’ in the generation
fleet, in the period from Jan-June 2008 (30.8 percent) to Jan-June 2012
(35.0 percent). In addition to this, the gross dependable capacity has
also increased by 49 percent from 1,396MW in September 2008 to 2,050MW in
June 2012. (Statistics available in KESC’s annual report 2011-2012). Concerning heat rate
issue, the design heat rate of BQPS-II is 6762Btu/kWh on LHV basis
comparable to any combined cycle plant of its class in the world today.
The statement made by the author in the previous research article, that
the heat rate of KESC’s BQPS-2 is 12,163 Btu/Kwh, is absolutely
incorrect. The efficiency corresponding to the quoted numbers in the
previous article, was of 5800Btu/kWh, which translates into 58.8 per cent.
Even the best thermal combined cycle plant in the PEPCO and KESC system
does not have an efficiency exceeding 50 to 51 per cent on LHV basis. For any power sector
analyst, it is but natural to look at the bigger perspective when putting
the puzzle together. While doing so, this austere reality cannot be
ignored that pre-privatisation there was literally no planned road map for
BMR projects. And the thermal plants commissioned were reflective of the
efficiencies of those units according to the then performance standards. Lack of regular
maintenance also resulted in the de-ration of capacity and reduction in
thermal efficiency of these plants. Whereas, these plants could not be
discarded in one go due to their lower efficiency. Replacement of these
units involved consideration of many factors that determine the cost of
electricity from new plants including construction costs as well as
availability of cheaper fuel, etc. In fact, the efficiency
pressures on KESC are maintained at a very high standard of expectation,
because NEPRA does not use or rather approve the actual heat rates but in
effect fixes an efficiency level, higher than the actual for the purpose
of calculating monthly FSA, as well as the Quarterly tariff determination.
Which are facts that can be officially verified with the national
regulator, if any true to the cause analyst or researcher wishes to do so,
prior to casting any baseless allegations against KESC. Any increase in demand
is met by generation of electricity via furnace oil due to limited supply
of gas by SSGC, which is highly unfortunate. Given the fact that KESC’s
gas requirement is 400mmcfd, while the average supply to it by SSGC stands
around the 160-170MMCFD mark; only translates into one thing; greater
reliance on the almost four times more expensive Furnace Oil, which is
detrimental not only to the consumers in terms of end user tariff, but
also to KESC in terms of its directly proportional adverse impact on
collections/ recoveries and cash flows. NEPRA regularly audits
KESC data and information, while determining the tariff rates or FSA,
based on the fixed standards and allowed heat rates Btu/kWh. Therefore,
any allegation on artificially inflated figures for claiming high amount
of subsidies is a charge on NEPRA. Further, the Technical Audits are
conducted where tariffs are determined annually which is being done in
case of DISCOs. KESC has multi-year tariff, which is based on pre-defined
efficiencies by NEPRA. It is certain that the efficiencies and benchmarks
fixed by NEPRA are higher than the actual results of KESC, causing both
efficiency and financial losses, to be borne only by KESC. The article is a
rejoinder to the story “Power projections” carried in the same space
on September 16
business By Bilal
Naqeeb The fire
incidence of factory in Baldia Town Karachi has exposed negligence and
lack of sufficient control by the government machinery. It is reported by the
media that factory owners violated multiple regulations. The majority of
the workers were working on a third-party contract and none of them had an
appointment letter. No worker was registered with the Employees Old-age
Benefit Institute (EOBI) and the Worker Welfare Board/Fund. On the other hand, the
grants announced by the Federal and Provincial governments will reach to
the families through a slow and traumatic processes.
It is a normal practice
in Pakistan that factories hire a large number of employees on ad-hoc
basis for the only reason of avoiding appropriate remuneration package and
social security benefits for which they are legally bound to provide their
regular employees. It clearly indicates that the government, formal
businesses and workers have no sensitivity about the corporate social
responsibility that encourages the acknowledgement of workers as a key
stakeholder. Unfortunately, the
situation is worsening as formal businesses have penetrated in the
Informal Economy to acquire labour on exploitative rates. During a
research assignment, I had an opportunity to meet with selected women
respondents who were working for factories as home-based workers and
connected through a chain of middlemen. With little or no education, none
of those women had realisation of the need of setting terms and conditions
of their work or appropriately negotiate their compensation. In most cases, income
was recorded as less than Rs50 per day which has no meaningful
contribution for an average family size of 7.5 per household. Due to lack
of policy, an estimated 5 million such women workers are deprived from
proper wages and social security benefits. Despite the presence of
several labour laws, workers of informal economy sector are not covered by
any labour legislation or administration due to negligence or the lack of
interest of the concerned authorities.
The role of trade unions
and civil society institutions that claim to work for the protection of
workers’ rights have not been satisfactory specifically for the workers
associated with informal economy. In order to take meaningful steps, a
comprehensive research is required to thoroughly study the rapidly
expanding Informal Economy Sector and its related aspects with formal
economy and exploitative prospects on workers.
HomeNet Pakistan, an
organization working to promote and safeguard the rights of women
home-based workers has conducted a preliminary study on the issues of
workers associated with Informal Economy Sector in Lahore city that
included the groups representing factory workers, street vendors, sanitary
workers, domestic workers, waste pickers, home-based workers, lady health
workers etc. The discussions were important to learn from the people
directly affected. The common issues were
irregular and low wages, lack of recognition as worker in labour policy
and deprivation from the health care and other social benefits.
The other important
issues to be considered by policy makers are being highlighted below. The privatization
without effective controls by the government is seen as threatening the
workers’ rights and depriving them from the social benefits. A sanitary
worker said that due to the privatization of Solid Waste Management
Department by the Government of Punjab, the sanitary workers have been
deprived from the minimum wage and benefits for which he was entitled to
previously as regular employee. Home-based workers have
reported energy crisis as one of the major issue which has reduced their
production or the cost of the production due to using alternate energy
sources.
They have less work opportunities in recent years. The women domestic
workers are facing a major issue of harassment for which they have no
mechanism to acquire appropriate support as it also deprives them from the
work opportunity. They are often blamed of theft and are tortured during
investigation by the family members and police, etc. Most of the waste
pickers belong to nomadic people living in temporary shelters. For this
reason, it is almost impossible for them to acquire CNIC which is the
basic requirement to claims basic rights and access social services.
The brick kiln workers
are the most neglected group as they are engaged in forced labour for
ages. They are not even sensitized on their exploitation and the issue of
their basic rights. In most of the cases, due to non-repayment of the loans provided by
their employers, it becomes the basic reason of their being caught in
bounded labour or slavery for years. In order to address the
issues, the re-orientation of trade unions and the civil society
institutions on labour laws as well as on their effective role in carrying
out advocacy for the protection of workers’ rights can be a step to
start with. It may help establish an accountability mechanism in both
public and private sector simultaneously. The government and
funding agencies should also support some pilot initiatives through civil
society organizations to form and institutionalise such forums which may
help enhance the capacities of the informal workers as well as their
access to social services. For example, mobilising and organizing informal
workers to be registered as cooperative body. It will facilitate the
workers to increase quality production, marketing and access the social
services and benefits including Employee Old-Age Benefits, Workers’
Welfare Fund, etc. Finally, it is appealed
to the concerned officials of the government that lessons learned from the
Karachi’s factory fire incidence should not be overlooked and concrete
corrective measures should be taken in favour of the social security and
protection of the workers both in formal and informal sector.
The
local level By Altaf
Hussain Pinjaro For last six
decades Pakistan has witnessed different political arrangements under
which it was run by the elected representatives, bureaucrats and the men
in uniform. People have been barely
involved in; and accommodated in the political arrangements so far. By and
large these different forms of the governance have not resolved the
fundamental issues common people are confronting with. To begin with, after the
ouster of elected Prime Minister Nawaz Sharif in 1999 by military
dictator, Musharraf in the name of establishing democracy at grassroots
level introduced the local government system in 2001. This was not a new
experiment in Pakistan. Ayub Khan had undertaken a similar effort in this
direction by floating and patronizing the system of basic democracies
during his dictatorial regime. The main purpose as
propagated for introducing the new system was to empower the people at the
grassroots level and to transfer power from the elite to the common
people. This system of grassroots democracy to bring out new leadership
and was aimed at solving problems of people at local level. The basic
thrust of this system was that the local governments would be accountable
to the citizens for their decisions. However, the system
could not produce the dividends it was propagated for. Instead, it
strengthened and promoted the ruling elite and their families. This is
what most of the people in rural Sindh generally believe. People from three
districts of rural Sindh: Sanghar, Mirpurkhas and Umerkot have no love
last for the local government system. Majority of the people interacted
with were of the opinion that local government system did not yield the
results they had expected from it. “Local government
system did not benefit the common people, it only strengthened power base
of the landlord-cum-politicians at even lowest level of Union Council”,
says Ghulam Ali from Sanghar district where feudal and dynastic families
have complete sway over politics. The system of local
government created polarisation at district, tehsil and union council
level it did not benefit the people. “The system of extending justice to
the people at their doorsteps and resolving their issues faded away once
same political families assumed reigns of governance at all levels”,
says Ghulam Ali. Sindh is the only
province in Pakistan with urban-rural divide, urban middle class striving
for local government system, while the rural political elite and other
stakeholders prefer commissionerate system at district level. As PPP-led coalition
government is set to complete its tenure in office in few months’ time,
political maneuvering has also speeded up to put in place system of local
government in Sindh. The political landscape of Sindh in particular is
getting heated up due to the promulgation of Sindh Peoples Local
Government Ordinance, 2012. People in rural Sindh
believe that their hopes and expectations from the devolution of power at
grassroots level vanished in the corruption and nepotism exercised by the
feudal-cum politicians who had complete control over the system. “We
have no concern with the system, we will now vote for the system and
people who ensure that our problems will be resolved”, says Imam Bux
from Mirpurkhas district. “We were enthusiastic
about the local government system in the beginning because we thought our
problems would be resolved at least at union council level and people
would get chance to get elected as at different levels, but it remained a
distant dream, district government’s all tiers were controlled by the
same feudal ruling class who exercised nepotism and carried out massive
corruption”, says Din Muhammad from Umerkot. Some people, however,
reckon local government system as platform for the political awareness of
the masses in broader perspective. “No doubt local government system
could not produce desired results, but it should have been given more time
to mature”, says Ghulam Haider. He says that it is a fact that the
feudal ruling elite maintained grip over the system, but system had many
good things, for the first time tenants and labour got representation in
the system. “People have started
realising significance of their participation in the political process,
local government in its spirit is pro-people and pro-poor system, it
should not be politicized, it should be given chance to flourish”, he
says. He, however, notes that
it’s an anomaly that human development indicators of Sindh paint a grim
picture, where more than 60 percent people do not have access to safe
drinking water; a significant number of children are deprived of the
education, mortality rate among new born babies and in mothers is very
high. “But that again is not only due to the failure of the local
government system but all political arrangements introduced so far are
equally responsible”, he maintains. Political maturity is
extremely important during such type of transition of political system. It
is important that whatever political system is introduced, it should at
least have two things, all the stakeholders should be taken on board and
brought on the same page, secondly the system should deliver to the
demands and expectations of the people who are the ultimate stakeholders
in any political system. Are
big dams the solution? By Bilal Ibne Rasheed “Water, water,
everywhere Nor any drop to
drink”: Samuel Taylor Coleridge in The Rime of the Ancient Mariner
(1798) The ironic predicament
of Coleridge’s ancient mariner highlighted in these prophetic lines has
an unequivocal contemporary relevance in today’s Pakistan. On the one
hand, according to the World Bank, Pakistan is one of the most water
stressed countries in the world, while on the other, the country continues
to face catastrophic floods almost every monsoon. Formulating strategies
for efficient water governance and sustainable conservation of water
resources pose a daunting task for Pakistani hydro strategists mainly
because the country has, unlike its neighbours India and China, only one
major river system — the Indus River system, and no additional water can
be injected into the system from outside. This lack of an
alternate river system is further compounded by a variety of factors,
including lack of political will, rampant corruption, population
explosion, inter-provincial disharmony, indifference of citizens towards
effective and economic utilisation of available water resources,
negligence towards repair and maintenance of water infrastructure, climate
change, and inadequate production of knowledge. In late-industrialising
countries, such as Pakistan, large dams remain one of the most viable and
inevitable options to retain, store, and conserve available water
resources despite the fact that there exists virtually unanimous
opposition to construction of these projects. Nature and society
interact with each other, Kevin Wehr argues, in complex ways to form a
dialectical relationship. Building dams is a peculiar instance of this
complicated and multifarious interaction in which, according to Anna
Danaiya Usher, social development attempts to overpower natural barriers
but in doing so dams create enormous ecological disruption, drastically
reduce biodiversity, affect pasture lands and forests along the stream
disturbing communities dependent on these ecosystems and result in
involuntary relocation of hundreds of thousands of people, thereby causing
irreparable social and cultural losses. Furthermore, as
highlighted by Thayer Scudder, there are problems associated with
financial corruption, violation of human rights, and deliberate
non-adherence to international declarations and agreements concerning the
planning and implementation of large dams. Having said that, in
countries like Pakistan, large dams remain an unavoidable and necessary
development option, albeit a flawed one, to deal with the ever growing
water and energy requirements of a rapidly expanding population. In a country like
Pakistan which has to face the consequences of ruinous floods almost every
year the role of large dams becomes all the more crucial and
indispensable. The floods of 2010 resulted in huge loses: Rs5 billion in
communication infrastructure, Rs250 billion in water and energy sector,
loss of 5.3 million jobs, and more than 20 million people affected. The Kalabagh dam, a
large dam project in Mianwali district of the Punjab province, has been
mired in the labyrinths of inter-provincial disharmony and political
manipulations ever since its inception in 1984. In 2008, Prime Minister
Gilani’s government decided to scrap the project because of lack of
political consensus among the stakeholders. One of the major
concerns of opponents of large dams is the involuntary relocation of
people whose livelihoods are directly dependent on the free flow of a
river. Generally, the most affected by large dams are peasants, tribal
communities, landless people — already marginalized groups — and since
large dams transfer a river’s flow into electrical energy which is used
to feed urban and industrial centers, dams help concentrate political
power of already powerful individuals and groups, thereby further
disempowering the marginalized and the poor. However, this argument
cannot be applied, in its totality, in the complex case of Pakistan. By
not constructing dams, like the Kalabagh dam, and in the absence of an
integrated flood management system coupled with construction of illegal
dykes by powerful landowners and influential politicians and the
incompetent, corrupt, and apathetic administration of provincial
irrigation departments, disasters like floods resulting from extraordinary
monsoon rains would continue to occur in the foreseeable future. Compared to the social,
cultural, and economic costs of permanent relocation of population
resulting from construction of large dams, the consequences of which can
be negotiated and brought under positive control if the guidelines
enunciated in the report of the World Commission on Dams are adhered to,
the cost of floods is astronomically high with millions of people
displaced for an indefinite time and facing an uncertain future. With projects like the
Kalabagh dam (installed capacity of 3,600MW) and the Bhasha dam (installed
capacity of 3,360MW) either scraped or postponed sine die, there is less
hope that the country would be able to overcome its ever-increasing power
shortfall in the near future. Currently, Pakistan faces a shortfall of
approximately 6,800MW which could have been taken care of had the
aforementioned dams been built on time. With no significant
projects for production of hydroelectricity, Pakistan would be forced to
turn to other sources of power generation which are not only less
environment friendly but also would be a huge drain on the economy which
is already in a shambles. The expertise and
experiences of China can be extremely useful. With more than half the
world’s large dams in China, the Chinese expertise in planning,
construction, maintenance, and implementation of large dams and the
experience of tackling the challenges posed by social, cultural, and
economic ramifications and consequences of these projects remain the most
comprehensive and unprecedented. By collaborating with China, Pakistan
would be able to draw on the unmatched Chinese expertise and experience
which would help Pakistan make these projects as efficient, equitable, and
sustainable as possible. China is on the verge of
becoming a water stressed country with northern China already a water
scarce region. In order for China to overcome its worsening water
situation, extensive research is being done to develop strategies to
improve water governance, strengthen water rights administration, improve
efficiency and equity in water supply pricing, control water pollution,
and improve emergency response. Just like China,
Pakistan would also have to do away with the traditional and outdated
institutional and policy framework to become a water efficient country.
Using the Chinese model of transition as a prototype and tailoring it to
suit the Pakistani conditions would not only save Pakistan considerable
time, effort, and money but also it would help foster greater mutual
cooperation between the two neighbours which, in turn, would lead to
greater environmental and economic sustainability in the region. According to the Asian
Development Bank, the irrigation system of Pakistan urgently needs reforms
and stronger institutional arrangements, the rate at which underground
water is being tapped is unsustainable, the coverage and quality of urban
water supply system is inadequate and unreliable, and there is no urban
waste-water treatment system.
research By Shahzada
Irfan Ahmed What does it
take to realise the potential of an activity that can bring economic
prosperity and jobs and reduce country’s dependence on import of a high
consumption product? In this case, the answer is 65 years and billions of
dollars which Pakistan spends on the import of edible oil to meet its
dietary needs. The reference here is to
the recently launched government initiative of importing and distributing
above 17,000 high-quality and genetically certified olive plants of
Turkish and Spanish origin to nurseries short-listed for the purpose.
Reportedly, the plan has been executed after detailed experimentation and
approvals from agricultural scientists that certain species of olive can
be produced here in huge quantities due to highly conducive climate and
soil quality. The Punjab Agriculture
and Meat Company (PAMCO) managed this distribution and the purpose was to
involve the private sector to ensure sustainability of the project. These
plants, which are mother plants, have been distributed for free so that
the nursery owners can produce more through grafting and other processes
and sell them to a large number of farmers desirous of growing olives on
their lands. The nursery owners had to undergo rigorous training at the
institute on how to handle olive plants. These imported plants
were kept at Barani Agriculture Research Institute (BARI), Chakwal for
four months. The staff of the institute still celebrates the facts that
not even a single plant died during the period, which shows they had
successfully adapted to the climate. But at the same time
skeptics are also in large numbers and they doubt the project will die in
its initial stage. Rumours are also rife that Pakistani importers of
edible oil,-a commodity which has the biggest import bill after petroleum
products, will do everything possible under the sun to foil this move. The News on Sunday looks
into the prospects of olive production in Pakistan. Dr Hamid Jalil, former
CEO of PAMCO, who spearheaded the initiative says it does not need rocket
science to prove that arid zones of Pakistan are suitable for olive
plantation. It’s a fact there are 6.6 million plants of wild olive in
the country which can be improved through grafting (qalam kari) process.
“If wild olive can survive without care, why cannot the quality olive,
especially when there is will and technical expertise available to the
farmers.” He recalls the time he
had spent as director at an agricultural research institute in Attock.
During this period from 1992 to 1994, he took an initiative and arranged
bud wood of olive plants from neighbouring Afghanistan. The whole belt
starting from Mansehra, Abbotabad, Waziristan and from there to
Afghanistan is rich in wild olive plantation. He had heard there were
olive orchards in Jalalabad which had prospered due to the interest taken
by Russians and the grafting they had done. Hamid tells TNS they
proceeded with grafting of wild olive plants with bud wood from
Afghanistan and the results were encouraging. The plants started giving
fruits and if a plant did not, the reason was simple: the technical
expertise to identify male and female parts was lacking. Hamid finds a lot of
similarities between the topography and climate of Pothohar region of
Pakistan and Spain. At times, he says, it is difficult to differentiate at
all, adding Spain with its 2.8 million hectares under cultivation meets 48
per cent of world’s demand of olives. On the other hand, Pothohar region
has 3.18 million hectares suitable for olive production but the country is
nowhere on the scene. He is quite hopeful
Pakistan can surpass production targets as results in some cases have been
marvelous. He tells TNS olive plants grown by some people in their houses
or farms have given yield as high as 80 kg per plant which is much higher
than global standard yield of 50 kg per plant. Hamid says one feels
amazed to know people have ventured into this field without government
support and succeeded. An enterprising olive farmer Izhar Yaqoob has
acquired 400 acres near Kallar Kahar to grow olive. “Just imagine what
they can do if government gives them a helping hand at this moment.” Jawad Qadir, a
horticulturist working with the company on olive project, dispels the
impression that it’s too ambitious a plan to execute. His point is that
it’s the best option as olive does not replace areas of other crops,
marginal and barren land can be utilised for the purpose of balancing the
ecosystem. He asserts the existence
of wild olive groves in Pothohar proves its historical adaptation in the
area. The other plus points he claims are that the productive age of olive
plant is over two centuries, it is environment-friendly, drought tolerant
and promises good economic returns. “It will come as a blessing for
farmers as less plant care is needed as compared to other fruit plants.
Unlike other fruits and crops, a large number of employment and business
opportunities exist during post-harvest, value addition and marketing
phases.” Jawad says olive
production will not simply reduce import bill, it will give a better
option to the country. The oil extracted from olive has high nutritional
and medicinal value and its fat content is also free from cholesterol.
“It may appear a dream now. But I am sure if things go as planned it
will take less than 5 years to trigger commercial production of Olive
orchards and nurseries in the country.” Mohammad Imran Amjad,
CEO PAMCO, believes oil cultivation is the best way to develop the
underprivileged rural areas of Pothohar in Punjab. This region including
district Chakwal, Rawalpindi, Jehlum, Attock and Khoshab does not replace
other crops due to unbalanced soil and unavailability of sufficient water
whereas olive needs less water than other crops. That is why, he says,
olive cultivation in this area is appropriate use of this idle land and
PAMCO is educating the farmers as it is a totally new experience for them. “Free distribution of
imported olive plants to farmers is the first step and we will pursue the
projects until plants are on fruiting to make Pakistan self-sufficient in
edible oil produced from olive.
Uneven
tax ratio By Tahir
Ali Though
agriculture accounts for nearly a quarter of Pakistan’s and Khyber
Pakhtunkhwa’s gross domestic product, the collection of taxes from the
sector has been negligible — just 0.11 per cent of KP provincial revenue
receipts (PORs) last year. Revenue is collected
from agriculture in KP through some direct taxes -Land Revenue (water tax
or Abiana), agriculture income tax (AIT) and Land tax (LT) –and non tax
heads (user charges). KP achieved the AIT/LT
target of Rs21mn last fiscal and target for this year is Rs22mn. With a
collection of Rs915mn in 2011, Land Revenue (LR) or water tax, one of the
major direct taxes in KP, is the second biggest single contributor to
provincial kitty after motor vehicle tax. Last fiscal, agriculture
and its related sectors also accounted for 2.6 per cent of the total
Rs6.34bn non-tax provincial revenues. Taxes from AIT were
Rs19.7mn in 2007 which came down to Rs17.3mn in 2008 and to Rs15.7mn in
2009 but rose to Rs17.5mn in 2010. The budget whitepaper
informs that AIT’s share was just 0.11 per cent in PORs of Rs18.91bn and
1.5 per cent in the direct taxes of Rs1.4bn in last fiscal year. AIT’s
share in PORs has been on the decline as it was 1.2 per cent in 2004-05
which came down to 0.41 per cent in 2005 and 2006 and to 0.37, 0.31, 0.24
and 0.19 per cent in the next four years. AIT/LT are collected by
the Revenue and Estates department through the patwaris while Land Revenue
(LR) is collected by the irrigation department from the farmers in return
for the irrigation water provided to them from canals, public tube-wells
or other sources. Under the 2001
ordinance, AIT is collected from the owner, mortgagee or lessee or the
tenants and levied on income from ‘cultivated land — the net area
sown, actually matured and harvested during a tax year, regardless of the
number of crops raised, including area under matured orchards. There is no exemption
for the AIT and LR. However, 5 acres or less of agriculture land under
crops or orchards was earlier exempted from LT in 2005. This limit has
recently been increased to 12.5 acres. Under the law, AIT would
be 5 per cent if taxable income is less than Rs0.1mn. And if the income
exceeds
Rs0.1mn but not Rs0.2mn, AIT would be Rs5000 plus 7.5 per cent of
the amount exceeding Rs0.1mn. If the income is over Rs0.2mn but less than
Rs0.3mn AIT would be Rs12500 plus10 per cent of the amount exceeding
Rs0.2mn. And if taxable income exceeds Rs0.3mn, Rs22500 plus 15 per cent
of the amount exceeding Rs0.3mn would be taken as AIT, provided that no
tax shall be payable on the first 80,000 rupees of the aforementioned
income in all the cases. LT is collected at a
fixed rate of Rs72 per acre over and above the exempted 12/5 acres of land
under crops and Rs300/acre for orchards. LR is Rs200/acre for
cereal crops and around Rs250 for other crops this year as compared to
Rs250/acre and over Rs300/acre for these crops respectively last year. The province should have
collected huge sums in AIT/LT if one goes by the slabs prescribed by the
agriculture income tax/land tax ordinance of 2001 but for snags like
malpractices in the tax collection machinery and tax evasion by the
powerful landed aristocracy. According to a report,
there were around 28000 landlords holding over five acres of land, but
only 100 were registered as AIT payers. Several farmers admitted
the net annual income from one acre of irrigated land and arid land is
estimated at around Rs0.1mn and Rs0.05mn. With around 4.5mn acres of
cultivated land in KP, income from the AIT/LT should have been dozens of
billions even if we take the first slab as benchmark.
While Rs46.93mn were
collected as AIT/LT in 2004, these came down to Rs18mn next year. An
official said the income from land tax/AIT came down from 2004 onward as
the government exempted 5 acres or less land from land tax as tax payers
decreased. But even if the number
of taxpayers came down, AIT should have gone up in wake of rising farm
incomes for increased support prices and rising cereal and fruit/vegetable
prices. On the contrary, though
per acre rate of LR or water tax has been decreased, its collection has
been on the rise making it the second biggest single contributor to
provincial economy after motor vehicle tax. Land revenue receipts
were Rs573mn and Rs572mn in 2008 and 2009. In 2010, it rose to Rs771mn and
was recorded at Rs915mn in 2011. It has been fixed at Rs920mn for
FY2012-13. The targets for the AIT
have always been fixed unrealistically ignoring several factors — the
issue of terrorism and resultant exemptions given to farmers, the lack of
enthusiasm on the part of taxpayers, lack of political will on the part of
government to tax the sector, capacity constraints and corruption of the
tax collection machinery and political pressure on tax-collectors and so
on. The AIT/LT targets,
resultantly, are missed. For example Rs90mn was set the target for AIT in
2008 and 2009 but actually recovery was only Rs18mn and Rs17.4mn
respectively. Farmers say big landlords hardly contribute any taxes while
the poor small farmers are subjected to unjust AIT/LT. “For the absence of
any reliable computerised system for the assessment and determination of
expected agriculture income each year and the lack of a sound computerised
database of all landowners in the province, the AIT is left at the
discretion of patwari. He can claim any amount from a landowner/farmer and
the later in turn has to pay it or bribe him. Patwari after all can hardly
be displeased as he has great nuisance value; he can damage property
record, lodge complaint against you in revenue court etc,” said a
farmer, wishing anonymity. During an assembly
session last month, members from treasury and opposition also severely
criticised the patwaris. According to farmer
leader Niamat Shah Roghani, “Patwaris lack the power to make the
powerful landlords pay the taxes. “The problem will be
there unless the land in the province is reassessed, land record is
computerised, an unquestionable database of landholders, their normal
incomes and AIT payers is prepared and the patwari discretionary role is
minimised in the system,” he argued. Farmers also complained
there was no formula as to how the difference in the production, seeds,
water, and hard-work employed thereon and the weather effects are to be
taken into consideration for fixing land tax. The provincial board of
revenue needs to provide basic training to revenue officials on computing
farm incomes on the basis of returns filed by growers. KP revenue minister
Mohammad Shuja Khan last month informed KP assembly that computerisation
of land settlement record in Peshawar district was at hand and would be
followed in seven other districts. Under the new policy, powers of
patwaris were also being curtailed, he assured.
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send more officials to the districts and tehsils? These issues remain
unresolved despite the 65 years of ‘nationhood’ where colonial status
quo has ruled.
