2017年-世界发展银行全球_Sindh_Public_Expenditure_Review_135页_3mb

Sindh Public Expenditure Review Summary

Core Content

This report is a Public Expenditure Review (PER) of Sindh Province, conducted by the World Bank Group, focusing on the management and efficiency of public spending, the expansion of the resource envelope, and the performance of key sectors such as education, health, and social protection. It provides an analysis of the province's fiscal and macroeconomic trends, revenue challenges, and the effectiveness of public expenditures in delivering social and economic outcomes.

Main Points

1. Sindh Province: Unleashing Its Potential

• Sindh is the most urbanized and industrialized province in Pakistan, with a population of about 49 million, contributing 28% to national GDP.
• Despite its potential, Sindh lags in economic and social indicators compared to other provinces and countries.
• The province faces significant developmental challenges, including weak social indicators and inefficient public service delivery.
• The review aims to identify reforms to expand the resource envelope and improve the efficiency and value for money of public spending.

2. Expanding the Resource Envelope

• The federal government has increased transfers to Sindh, particularly after the 7th NFC award in 2010.
• However, these transfers are insufficient to meet the needs of infrastructure and public services.
• Sindh needs to increase its own-source revenues (OSR) to support development.
• Sales Tax on Services (STS) has shown significant growth, rising from PRs 1.1 billion in FY11 to PRs 64 billion in FY16.
• The tax base for STS is limited, as it currently excludes major sectors like wholesale, retail, and transport, which are dominated by small units with poor record-keeping.
• The Urban Immovable Property Tax (UIPT) also has untapped potential due to exemptions and under-valuation of property.
• The Agriculture Income Tax (AIT) could generate up to PRs 4 billion if properly implemented.
• User charges have declined significantly, from 14% of OSR in FY97 to less than 1% in FY16, indicating a lack of user fee collection.

3. Improving the Efficiency of Public Spending

• Despite increased allocations, much of the funding goes to employee-related costs, including salaries, allowances, and pensions.
• Recurrent expenditures have grown, but the quality and quantity of service delivery have not improved significantly.
• Development expenditures have increased in real terms, but remain only 30% of total expenditures, with operational efficiency still a concern.
• Education now accounts for about 25% of total recurrent expenditures, up from 17% in FY12.
• Health is the fifth-largest recipient of public funds, with recurrent expenditures increasing from 7% to 9% of total recurrent expenditures.
• Social protection has seen mixed results, with spending fluctuating due to its ad-hoc nature.

4. Sectoral Efficiency and Equity

• Education Sector Inefficiencies:

  • There is a misallocation of schools and teaching staff across districts.
  • Schools in urban areas are over-concentrated, while rural areas suffer from high student-teacher ratios (STRs).
  • Per-student expenditure is skewed towards wealthier urban districts, with some poorer districts spending less than one-quarter of what is spent in Karachi.
  • The Annual Status of Education Report (ASER) and Standardized Achievement Test (SAT) show gaps in learning outcomes.

• Health Sector Inefficiencies:

  • Public health expenditure has increased, but the allocative efficiency remains low.
  • The Primary Health Care (PHC) system is under-resourced, with many Basic Health Units (BHU) lacking adequate staffing and infrastructure.
  • The President's Primary Health Care Initiative (PPHI) has not been fully implemented.
  • Health outcomes such as Infant Mortality Rate (IMR) and Maternal Mortality Rate (MMR) are still poor compared to other provinces.

• Social Protection Inefficiencies:

  • Social protection spending is often ad-hoc and not well-targeted.
  • The Benazir Income Support Program (BISP) and Benazir Bhutto Shaheed Youth Development Program (BBSYDP) are important initiatives but need better implementation.
  • There is a need to improve the institutional arrangements for social protection, including the Social Welfare Department (SWD) and Sindh Revenue Board (SRB).
  • The Proxy Means Test (PMT) and Sindh General Provident Investment Fund (SGPIF) are mechanisms used for targeting, but their effectiveness is questionable.

Key Recommendations

• Increase Own-Source Revenues (OSR): Focus on improving the collection of Sales Tax on Services (STS), Urban Immovable Property Tax (UIPT), and Agriculture Income Tax (AIT).
• Improve Revenue Collection Mechanisms: Enhance the capacity of the Sindh Revenue Board (SRB) in terms of manpower and technology to better collect taxes.
• Enhance Allocative and Operational Efficiency: Redistribute resources more equitably across districts and improve the quality of service delivery.
• Stabilize and Rationalize Employee Expenditures: Address the rising wage bill and pension payments, which are consuming a large portion of the budget.
• Prioritize O&M Expenditures: Ensure timely allocation of funds for operational and maintenance (O&M) to prevent infrastructure erosion.
• Improve Public Financial Management (PFM): Strengthen the Planning and Development Department (PDD) and Public Investment Management (PIM) systems.
• Strengthen Social Protection Programs: Enhance the targeting and effectiveness of SPL programs and improve the Sindh Strategy for Sustainable Development (SSSD).

Conclusion

The report emphasizes the need for Sindh to move from merely increasing public spending to improving the efficiency and equity of its resource allocation. By addressing revenue collection, optimizing public expenditure, and enhancing the effectiveness of key sectors, Sindh can unlock its potential and achieve more equitable and productive development outcomes.