[Pakistan] Share of poverty-related expenditure falls in FY 05

From The Daily Times

LAHORE: The share of poverty-related expenditure in total public expenditure declined from 27.3 per cent in fiscal year 2004 to 26.4 per cent in fiscal year 2005 due to the government’s pursuance of an overall expansionary policy.

According to an Asian Development Bank report, the pro-poor expenditure has been grouped under the heads of improving access of the poor to market and community services, fostering human development, accelerating development of rural areas, improving governance and providing safety nets.

Expenditures under all these heads, except safety nets, recorded increases in FY2005, with the sharpest increase being in expenditure on access to market and community services (46.3) per cent, followed by development of rural areas (34.4 per cent), and governance (20.7 per cent). Expenditure on human development increased by 18.2 percent. Expenditure on education, which accounts for 37.4 per cent of the total pro-poor expenditure, increased by 19.7 per cent to Rs 116.9 billion in FY2005. Expenditure on health increased by 16.3 per cent to Rs 31.4 billion. The sharpest increase of 39.7 per cent was recorded in expenditure on preventive healthcare measures, which accounted for more than one-third of the increase in total expenditure on health.

The increase in expenditure on preventive health measures was mainly due to a more than a four-fold increase in current expenditure and a 68.2 per cent increase in development expenditure by the Sindh government. It is encouraging to note that the current expenditure on rural water supply and sanitation, another very important service from the point of view of poverty reduction, recorded a sharp increase in FY2005.

Rural electrification plays an important role in boosting the economy of rural areas where the bulk of the poor live. In the area of governance, expenditure on law and order increased by 20.3 per cent to Rs 47.4 billion and that on justice administration by 26.8 per cent to Rs 3.1 billion.

In addition to pro-poor budgetary expenditure, the government of Pakistan provides safety nets for the poor through transfers from the Zakat and Employees Old Age Benefits Institution, as well as micro-credit disbursed by the Pakistan Poverty Alleviation Fund through non-governmental organizations, Khushali Bank and Zarai Taraqqiati Bank Limited (ZTBL). The share of ZTBL accounted for only 1.0 per cent. The total number of beneficiaries of microcredit increased by 64.3 per cent to 470,000, and the average loan amount availed by them increased from Rs 10, 608 to Rs 12,185.