In defence of BISP and NFC

The crushing fiscal constraints currently facing Islamabad are forcing moves in various directions to tame the deficit. A number of options can be available. One rational way would be to look for ways to economise. Instead, however, the selected option appears to be to poach on resources earmarked for public welfare and those available with the provinces.

Of late, there has been a spate of negative and disparaging comments on public forums, including the media, targeting BISP — the cash transfer programme that benefits nine million economically stressed families — and the 7th NFC, which has strengthened provincial fiscal autonomy in line with the spirit of the 18th Amendment. All three were enacted by the post-Musharraf PPP government.

To BISP first. The latest assault on BISP is that it has failed to register any impact on poverty and thus the amounts allocated are a waste. The fact is that BISP was never designed as an 'anti-poverty' programme. It was designed to supplement the low incomes of the economically stressed segment of the population; hence the name 'income support'.

BISP came under attack from the outset. The conceptual attack was based on the argument that cash transfers amount to creating 'dependency' and 'beggary' and that the resources can be used more effectively in setting up income-generating and skill development programmes.

The fact is that over the space of half a century, numerous such programmes have been launched, with considerable resources absorbed in administrative expenses but little to show in terms of outcomes. And two, there is a large body of over half a century of empirical evidence from developed countries to show that cash transfers boost consumer spending and, resultantly, spur investment and employment.

The operational attack was directed at the parliamentarian-based targeting. It was charged that the programme was intended to enable ruling party parliamentarians to distribute patronage among their supporters. The fact is that all parliamentarians — government and opposition – received an equal number of forms and were informed that there was an automated Nadra-based selection process and that any form not conforming to the eight-point objective criteria fed into Nadra computers would be rejected.

Accordingly, only about 2.2 million forms were accepted — electronically — out of the more than 4.5 million submitted. The rejection rate was over 50%. It was Nadra computers, and not parliamentarians, which had the final say on selection of beneficiaries. Moreover, no study has provided any objective evidence that BISP's parliamentarian-based targeting approach led to wrongful selection of beneficiaries or was an instrument of political patronage.

BISP is a women-centred programme, benefitting nine million families. The amount provided enables a recipient family 15-day atta supply at current prices and shores up their purchasing power by up to 15-20%. That is eminently significant. Any attempt to do away with the programme would amount to an assault on the bellies of the poor.

To NFC now. The substance of the attack is on the fact that by giving away nearly 60% of revenues to the provinces, the centre is left 'empty-handed' and facing a fiscal crisis; thus, the need for a reversal. Facts do not support this view.

It may be recalled that the 7th NFC and the 18th Amendment were enacted almost simultaneously. The 18th Amendment abolished the 47-point Concurrent List, transferring most of the items to the provinces (which provide the basic services — education, health and law and order, in particular — to the people). Thus, it was reasoned that the demands on federal resources would contract and that on provincial resources would increase and this formed the principal basis for enhancing the provincial share.

It was then deemed that about 15-20 federal divisions would no longer be needed and could be abolished; effecting significant fiscal savings. That has not happened. As such, it is Islamabad itself, rather than NFC or the provinces that need to be held responsible for the federal fiscal crisis. Any assault on the NFC would be damaging to the spirit of the federation.

The writer was the first head of BISP and had designed the programme. He was also Sindh’s technical member on the 7th NFC. Currently, he represents Balochistan on the 10th NFC. He tweets/posts @kaiserbengali

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Originally published in The News