Punjab Vision 2020

PUNJAB’S VISION 2020
PRE BUDGET POLICY ADDRESS
OF
CH. PERVAIZ ELAHI

CHIEF MINISTER, PUNJAB
June 15, 2004

Punjab’s Vision 2020 (i)
TABLE OF CONTENTS
PAGES
INTRODUCTION 1-2
VISION 3
BROAD-BASED LONG TERM STRATEGIES 4-7
MEDIUM TERM STRATEGIES 7 - 15
AGRICULTURAL SECTOR 8-9

THE MANUFACTURING SECTOR 9 - 13
MINERALS AND NATURAL RESOURCES 13
SERVICES 14 - 15
LINKS WITH LAST YEAR’S POLICY STATEMENT 15 - 37
GOVERNANCE REFORMS 15 -22
Management of Politics 16
Devolution and Local Governments 16 - 17
Access to Justice 17 - 19
(Judiciary, Police, Jails)
Civil Service Reforms 19 - 20
Accountability 20 - 21
Information Technology 21 - 22
SOCIAL SECTOR INVESTMENTS 22 - 30
Education 22 - 27
(Elementary Education, Higher Education, Special Education)
Health and Population Welfare 27 - 30
PUBLIC HEALTH (Water Supply and Sanitation) 30
DIRECT INTERVENTIONS FOR POVERTY ALLEVIATION 30 - 34

(Population below poverty line)
Zakat 32 - 33
Bait-ul-Maal 33
Micro-Credit through Punjab Rural

Support Programme 34
Punjab’s Vision 2020 (ii)
Access to Physical Assets 34

(Land to Landless, Shelter to the Shelter less)
SOCIAL WELFARE 35
MINORITIES 36
WOMEN DEVELOPMENT AND GENDER REFORMS 36 - 37
ECONOMIC GROWTH STRATEGY 37 - 49
AGRICULTURE 37 - 41
Extension 38
Research 39
Marketing 39 - 40
Credit Availability 40 - 41
IRRIGATION 41 - 44
LIVESTOCK AND DAIRY DEVELOPMENT 44 - 45
ENABLING ENVIRONMENT FOR ENTREPRENEURS 46 - 47

(Industrial Development and Labour Reforms)
HOUSING AND CONSTRUCTION INDUSTRY 48
DEVELOPING COMMUNICATIONS NETWORK 48 - 49
GOVERNANCE REVISITED 49 - 55
REFORM OF PLANNING AND IMPLEMENTATION PROCESSES 49 - 51
PUBLIC SECTOR DEVELOPMENT INVESTMENT 50
SECTORAL POLICIES 50 - 51
(Social Sectors, Urban Services, Economic Infrastructure)
IMPLEMENTATION AND MONITORING 51
FISCAL AND FINANCIAL MANAGEMENT 52 - 55
CONCLUSION 55
PUNJAB’S VISION 2020
PRE BUDGET POLICY ADDRESS OF
CH. PERVAIZ ELAHI, CHIEF MINISTER, PUNJAB
June 15, 2004
Ladies and Gentlemen of the Media!
I accord you my warmest welcome.
Last year, on the eve of the Budget 03-04, I had issued a policy statement
in which I had expressed the vision of my government. You may recall that in my
policy statement I had stated that reform was a continuous process and the best
of reform agendas needed to undergo a process of change through consultative
process. This year’s policy statement builds upon and vastly expands our past
policy initiatives.
Last year I had introduced the concept of a medium term budgetary

framework (MTBF) that involved developing a vision and a three year rolling
strategic plan for the development of the Punjab combined with a plan for
enhanced services to the citizenry of the Punjab. Last year’s budget was the first
year of the plan. In sharing our economic vision with you today, I would also give
the highlights of our performance and achievements during the out going
financial year.
Over the years and particularly during the last year and a half I have
visited every nook and corner of the province and have met a vast cross section
of the people. Our province with a population of over 80 million people is clearly
the nerve center of the country. Punjab has a culture of relative progressiveness
that is reflected in our agriculture, industry, services and every day life. Our
people are industrious, friendly and moderate. We have a long history of
craftsmanship and creativity. To top it all there is a great desire in our people to
improve their lives, their province and their country. It is my firm belief that if
Punjab grows and prospers, so will the other provinces. If Punjab is in the
doldrums it can drag the rest of the country down.
Punjab’s Vision 2020
Everywhere I go in the Punjab people are clamoring for development and

progress, they want good education facilities and a sound future for their
children, they want good infrastructure for their communities and they want Jobs;
meaningful, permanent and productive Jobs. It is quite clear that the people of
Punjab are willing to sacrifice today for a happier tomorrow; they will support any
government initiative that takes the province on a sustained path of growth and
prosperity. In fact, the people of Punjab wish that Punjab should be the role
model for development. We must show to the rest of the country how to achieve
a quantum jump in development and promote rapid economic growth to pull our
province and the rest of the country out of its entrenched poverty. By our own
efforts and home grown policies we shall provide a golden future for our people
and at the same time restore our national dignity and sovereignty in the comity of
nations. It is my firm belief that our people deserve nothing less.
Punjab is truly blessed with a huge agriculture resource with a great

untapped potential. Its land, water, weather and people if harnessed properly
can yield large gains and lift the country out of its poverty. It’s human resources
can lay the foundation of high value addition not only in agriculture but also in
industry and services. Unlike some mineral rich areas of the world Punjab has to
rely on the brain power of its people for growth. Nature has therefore ensured
that if Punjab has to develop it has to develop its people which are its greatest
resource. It has to take the ‘intelligence’ path to development rather than rely on
the commodities path (mineral and non-mineral) to development. This in itself
represents a great potential as the past 100 years of global manufacturing has
demonstrated that while value of commodities have declined world wide growth
in per capita value addition based on skilled human resources has grown
exponentially.
The task is challenging and would need a sustained effort over a long
period of time. But first, we need to spell out a vision for Punjab as the largest
province of the country.
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VISION 2020
The vision for Punjab, that I believe, every citizen yearns for is a vision of
relentless pursuit of modernization, innovation, confidence and tolerance. The
province has to lead the country into the twenty first century. This vision would
mean that fifteen years down the road, by 2020, Punjab would be a fully literate,
fully employed, highly educated, skilled, talented, tolerant, culturally
sophisticated, internationally connected, and a reasonably well off healthy
society. It will have an excellent education system, thriving and competitive
markets, strong internationally competitive companies, world class infrastructure
with modern urban centres, a high value adding agriculture sector and a smart
small and efficient government - An economy with significant presence of
international investors and a per capita GDP in excess of US$ 2000. This
implies that we will double our GDP every eight years or so. This in turn means
that Punjab will grow its per capita GDP by over eight percent a year.
This is a tall order particularly when the levers of development are not
entirely in the hands of the provincial government. The federal government plays
an extremely important role. It is totally in-charge of fiscal and monetary policies;
it frames the tax policies, trade policies and also plays an important role in the
regulatory environment of firms and companies. This means that federal policies
have to be conducive to provincial development. Fortunately, the federal
government has recently been able to bring about a good measure of
macroeconomic stability to the country. The provincial development also
depends on key federal structural policies such as trade, tax and regulatory
policies that are conducive to a positive investment climate in the country.
However, macro-economic stability by itself is not enough! Time has come to
fully take advantage of federal policies for promoting the investment climate in
the provinces. We will provide the needed push but it is quite clear that
development of a province critically depends on close federal-provincial
partnership.
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BROAD-BASED LONG TERM STRATEGIES
What strategies can the Punjab government adopt to move towards

the vision spelt out above? Basically the Punjab government would need to
develop a comprehensive set of strategies in several broad areas as listed
below:
1. Develop an urban strategy.
2. Develop a rural strategy.
3. Develop a human development strategy.
4. Develop a physical infrastructure strategy.
5. Develop a cluster development strategy.
6. Develop a provincial regulatory strategy.
7. Develop a development funding strategy.
The proposed Punjab development strategy revolves around the twin

strategies of urban and rural development. Large cities tend to be most
productive parts of any society. The urban areas are a major source for new
ideas, innovation and commercial activities. They tend to have higher incomes
due to the concentrations of firms, labor and product markets, production
centers, sub-contracting and industrial clusters, and linkages to international
markets. Punjab is blessed with large cities like Lahore, Multan, Faisalabad,
Gujranwala, Sialkot, Rawalpindi and many others, that can be the magnet of
growth for the surrounding rural areas. Each city has its characteristic
competitive advantages that need to be greatly magnified with a quantum jump in
deployment of resources and effort. This means that urban institutions of
currently mediocre standing need to be developed into world class institutions.
Urban infrastructure deficit has to be removed, planning has to orient towards
facilitating the cities to become more efficient living and production areas. The
major urban population centres need to be connected by high speed highways
and rail links. The urban areas are the homes of the industrial firms and in the
words of Alfred Chandler of Harvard University, “a nation’s economic growth and
competitive strength rest on more than natural resources, labor and managerial
skills, available capital or even the size of internal markets. The wealth of
nations during the last hundred years has been based on the ability of
industrial enterprises to adopt and to develop technologies and to devise
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administrative structures to co-ordinate the processes of production and

distribution.”
Punjab has many large industrial concentrations. Notable examples are

textiles, leather and light engineering goods. There are major clusters in these
areas. A coordinated effort to provide support to these areas to form world-class
clusters can have a dramatic impact on Punjab’s competitiveness in world
markets. This would require development of industrial enclaves around these
clusters where reliable and adequate infrastructure would be provided, law and
order would be assured and interference from government inspection machinery
would be minimized. Assistance in inducting new technology, provision of world-
class engineering and training programs and assistance in information
generation on world markets and trends could be provided. Punjab could set the
objective of becoming a major player in the world in these industries.
The rural strategy has to be built around the key strengths and
advantages at the district level. Each district needs to assess its comparative
advantage for value added crops and agro-based industry. Rural development
has to be pushed by much greater levels of high value products in agricultural
output based on provision of technological and process improvements, creation
of rural markets, providing ready access to micro-credit, provision of cool chains
and storage facilities, transport facilities and road networks connecting producers
to markets. The vast irrigation network of the Punjab can be a major source of
competitive advantage for the Punjab by vastly improving its efficacy and reach.
We have to switch our focus from a production strategy of self sufficiency in food
production, to a strategy where we fully exploit the potential of high value added
agricultural products and livestock development while maintaining strategic
reserves of essential food grains. The adoption of this strategy could multiply the
returns to the farmers of the Punjab and boost the GDP of Punjab manifold.
The human development strategy must be integrated with the urban and
rural strategies. Along with the health policy, an education policy is a key
ingredient in the human development strategy. Universal primary education
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including adult education has to be put on a fast track with full commitment and
resources of the provincial government behind it. We need world class schools,
vocational training institutes and engineering universities that can provide a
steady stream of outstanding and practical engineers to feed into the industrial
clusters. Agriculture needs agriculture universities that make a difference. Years
of neglect need to be reversed. Entrenched vested interests need to be
removed. International collaboration and faculty assistance would have to be
tapped. Just tinkering with existing policies won’t do. Major improvements have
to be made. If our products have to compete in world markets, our students and
workers have to have an even playing field, they must be provided with at least a
minimum standard of knowledge based on modern curricula and effective
teachers.
While federal institutions are majors players in providing physical

infrastructure like power, telecommunications, highways and transport etc. the
Punjab government can play an important role in provision of urban and rural
infrastructure like water and sewerage, urban, rural and intercity transport
systems and even electric power. Developing a framework in which the private
sector can provide the infrastructure at a reasonable price and quality would be
one of the main areas of future development.
The Punjab government would have to reinvent itself and learn to become
a real partner with the private sector. This would require minimizing its regulatory
and control role; creating one window operations where possible, eliminating
laws that no longer make sense and enforcing regulation in a light-handed
manner. Such light handed regulatory environment has been created by many
countries and the Punjab government needs to take a close look at its own
regulatory structure and processes to bring it close to international best practices.
Finally the government needs to have a development funding strategy.

The traditional funding from budgetary allocations is not going to keep pace with
the requirements for Punjab’s future development strategy. Innovative financing
strategies outside the budget particularly for urban projects can be developed to
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add to the budgetary resources. User charges and dedicated taxes for specific
purposes can be developed. The people of Punjab would be willing contributors
to the development effort through enhanced compliance with tax laws and
collection procedures if the quality of services provided to them improved
significantly. We on our part will guarantee that every rupee collected as taxes
will be accounted for and spent on the provision of essential services and
development of the province.
MEDIUM TERM STRATEGIES
While the vision and the broader long term strategic game plan provides
good guidance for future activities, we must translate this into a medium term
action plan that can be undertaken from this year onward for the next three
years. In the medium term your government has decided to focus on
poverty reduction as a prime goal. It will be our overarching objective to
improve the lives of people by improving their incomes and improving the
delivery of public services. This twin objective requires that we
significantly enhance the capacity of the economy to create jobs on the
one hand and improve the state capacity to deliver public services on the
other.
It has been estimated that if the growing trend of poverty and

unemployment in the Punjab has to be reversed, then the Punjab economy has
to create at least one million new, sustainable and permanent jobs every year.
This will require that the job creating capacity of the economy will have to be
doubled compared to the recent past. In terms of GDP growth this would require
an annual GDP growth in excess of 7 percent. This is well in line with the growth
rates achieved by other high growth countries but it has so for eluded us. I
believe that our macroeconomic stability provides us with a great opportunity to
achieve these high growth rates provided we considerably improve our
institutional and technological standards and frameworks in the Punjab. As a
target I have instructed that 15 percent of the new one million jobs be
created in the public sector by filling gaps in areas where public service
delivery is deficient. The rest will have to be generated by the private sector.
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Our role in the government would be to provide an environment conducive to the

private sector to flourish and grow in the Punjab and create the required jobs.
The economy of Punjab rests on four pillars:

1. Agriculture
2. Manufacturing
3. Services
4. Minerals and natural resources
It will be our endeavor to jump start each area and set in place policies
and strategies that ensure that we fully exploit our potential in each of these
areas.
AGRICULTURAL SECTOR
We have to bring our agricultural sector into the 21st century. As an

objective I want our agricultural sector to transform itself from a traditional
producer of basic food grains and raw materials for domestic markets, to a sector
that excels in value added crop production for international markets and adds
value to raw materials through agro based industries. This transition will have to
be based on top quality agricultural research, provision of top quality input
package (at the right time), provision of top quality distribution and marketing
infrastructure. To meet these objectives we plan to take the following medium
term initiatives:
• Increase Public investment in
Agricultural research
Extension services
Irrigation facilities
Water management
Forest development
• Promote private sector investment in

Livestock breeding
Veterinary services
Seed technology
Agricultural services
• Modernize Wholesale markets

Establish new chain of wholesale markets
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Reform market regulations

Improve market infrastructure through public private
partnerships
Promote development of appropriate cool chains.
Establish grading and testing facilities
Enforce food safety regulations in line with international
standards
• Exploit competitive advantage of each district

Develop profile of agricultural potential of each district
Develop potential of agro-based industry for each district
Support regional agricultural and agro industry development
strategies
Establish fund for research and proto-type development
projects
THE MANUFACTURING SECTOR
With the passage of time the manufacturing sector will become the
dominant sector in the economy of the Punjab. I believe that after the textile
industry we have to move on to the higher value adding engineering industry.
This industry is labor intensive and can literally create millions of much needed
jobs. It is for this reason we have decided to develop a light engineering triangle
(The Punjab Engineering Triangle) as a prototype for development of other
clusters. This cluster is located north of Lahore and comprises the cities of
Lahore, Gujranwala, Gujrat, Wazirabad, Daska and Sialkot.
Figure. 1 The close location of thousands of

enterprises in a relatively small area gives
Gujrat
Sialkot us the opportunity to develop the entire
Daska area based on economies of scale. The
entrepreneurs in the area are extremely
dynamic and I am sure we have a very
Gujranwala
sound basis for public private partnership
Lahore
in developing the Punjab Engineering
The Punjab Engineering Triangle
Triangle as an engineering cluster.
This area has already created a critical mass of manufacturers. A

program of upgrading the entire industry to achieve technological, design,
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manufacturing, management and marketing capabilities is needed. This would

enable us to meet the challenges of a much greater liberalized trade regime in
both domestic and foreign markets and can be very cost effective and beneficial
for the industry, the province and the country. The Punjab Engineering Triangle is
ready for a “catch-up competitiveness” program. Postponing this program may
jeopardize the viability of this great concentration of engineering (potential)
capabilities due to relentless competition from across the border once SAARC
related free trade areas come into being.
While the macroeconomic framework, trade and tariff policies and the
overall legal framework are in the domain of the federal government, the
provincial government can play a major role in creating the ability in our people to
engage in “catch-up competitiveness” by absorbing, adapting and improving on
the technologies that underpin new products, services and processes. Catch-up
competitiveness in each part of the engineering value chain depends on
entrepreneurship, high quality educational provision and market-friendly
institutions and infrastructure. The provincial government’s role in this effort will
have the following four dimensions:
1. Create effective institutions for developing technological skills

and design capabilities:
This would require a major human resource development program

based on creation of high quality technical universities,
polytechnics, vocational training institutes and funding for technical
training in foreign institutions. In the context of the Punjab, the
Government of Punjab has decided to establish a university in the
Punjab Engineering Triangle. We will turn this university into a
technical and management university based on the model adopted
by China, Singapore and other East Asian countries. These
countries have created world class technical universities, recruited
international faculty and conduct research and development to
assist their manufacturers in innovation and improvements in
design, process and management. The Government of Punjab
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would seek collaboration of one of the great manufacturing nations

of the world (Germany or Japan) along with donor and World Bank
support to develop this University to meet the requirements of the
Punjab Engineering Triangle.
Similarly through TEVTA and collaboration of some industrialized

country institutions, model vocational training institutes and polytechnics would
be located in the triangle. Finally the Punjab Government would establish with
the participation of the stakeholders a skill development fund for training of
engineering and technical personnel in local and foreign institutions.
2. Provision of high quality Physical infrastructure:
This infrastructure would include the establishment of Export

Processing Zones, industrial parks, communication networks
(Roads, rail etc.) providing quick link to the new Lahore Airport,
building and upgrading highways within the triangle and upgrading
highways to India. Improving infrastructure for existing clusters and
helping them move to new industrial parks and the EPZ.
3. Provision of High Quality common facilities:
This would require setting up of research and testing facilities,

starting environmental protection initiatives and projects, setting-up
of quality standards and creation of technical and marketing
databases. This would require establishment of new institutions as
well as opening up of branches of existing institutions.
4. Creating an image and marketing of the Punjab Engineering

Triangle:
The objective would be to attract domestic and foreign investment

into the triangle. Promote relocation of engineering industry from
the industrialized countries to the triangle and assist local clusters
in establishing links with global value chains. This activity would
also tie in with federal government initiatives and interventions for
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investment promotion. The Punjab industries department will be

revamped to provide the necessary administrative support.
5. Implementing “Catch-up Competitiveness” in the Punjab

Engineering Triangle:
Implementing the catch-up competitiveness program in the Punjab

Engineering Triangle would tax the abilities of the Government of
Punjab and would need total commitment from the top hierarchy of
the Government for success. I will take personal responsibility for
developing this innovative development effort and ensure that the
entire government will put in its best effort. The project can be a
major source of growth not only for the Punjab but for the entire
country as linkages between the triangle clusters and the rest of the
country would have a multiplier effect for the entire economy.
To effectively implement the program an organizational structure

would have to be created that can formalize the vision of the project
into a series of development projects and proposals that can be put
through a fast track approval and budgetary process and
implemented by the implementing agencies of the Punjab
Government. For this purpose an overall development board,
called the Punjab Engineering Triangle Development Board
comprising ex-officio and private sector members under my
chairmanship will be created. Similar effort will be needed for the
other industrial and city clusters and similar setup would be created
at the appropriate time.
The Main features of our (other) initiatives are as follows:
• Promoting the development of clusters through public-private

partnerships
The Light Engineering cluster in the Lahore, Gujrat and

Sialkot Triangle
The Leather cluster (Kasur/Sialkot)
The Textile cluster (Faisalabad, Lahore)
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The Cotton and Ginning Cluster (Multan, RY khan)

The Furniture cluster (Gujrat, Jhelum, Rawalpindi)
Other City clusters development
• Improving Business Climate for firms
Rationalization and reduction in taxes

Rationalization of labor laws to promote employment
Revamping Industrial Regulations including inspections
relating to boilers, buildings, electricity etc.
MINERALS AND NATURAL RESOURCES
While clearly our human potential is our biggest asset and we are focusing
on it as our key success factor, exploitation of the province’s mineral and natural
resources will also play a significant role in generating income and employment
opportunities for our people. We already have a base of mineral activity in the
province involving oil and gas, natural chemicals, rock salt, coal and iron ore etc.
We need to vastly expand our activities in this vital area. The mineral and natural
resource strategy would have three components:
1. Exploration
2. Development
3. Marketing
The basic strategy would be to promote the private sector to actively

participate in this critical sector. The Punjab government will rationalize the
existing laws and regulations to remove all impediments in attracting investment
in the sector. We will establish a development fund that can be tapped by the
private sector for purposes of mining activities. However, a lot of work needs to
be done in this sector and the independent Mines and Mineral Development
would need to energize itself to develop an action plan for promoting this sector.
Currently this sector contributes less than 2% of Provincial GDP.
The vast water ways in the Punjab are our natural resource that provides
us with an opportunity to harness the power potential of these flows and generate
cheap electricity for our rural communities. A comprehensive power development
program is being prepared.
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SERVICES
Services contribute more than 50% towards the Provincial GDP and there
is great potential to create jobs in the services sector. The current annual growth
in this sector is 4.5% while it can easily reach double digit levels. This sector
comprises the booming housing and construction industry, wholesale and retail
trade, transport storage and communication, tourism, hotel industry and resorts.
This sector would require the following policy interventions:
• Stimulate Job creation in the construction and housing industry
Rationalization of stamp duty

Rationalizing commercial zoning regulations
Rationalizing development charges
Rationalizing rent restriction ordinance
Promoting construction of properties for rental purposes
• Boost tourism, hotel and resort development for income

generation and employment
Development of tourist resorts

Promotion of hotel chains
Promotion of entertainment industry
Development of theme parks
General promotion of tourism
• Improving communications and transport services
Improving inter city and urban transport

Improving and modernizing urban and rural road networks
Developing mass transit networks for mega cities
• Promoting wholesale and retail trade
Developing urban commercial centres

Developing linkages between urban and rural marketing
networks
Providing marketing linkages between micro-credit based
activities and larger marketing network
Ladies and Gentleman, I have outlined above an ambitious vision, and a

challenging long and medium term development strategy. I firmly believe that
this is very much achievable knowing very well the talent, hard work and
determination of our people. I am sure that with the full support of the people we
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will be able to turn our dreams into reality. The only thing required is to believe in
ourselves and dedicate ourselves to the task at hand.
LINKS WITH LAST YEAR’S POLICY STATEMENT
The long term and the medium term vision and strategy enunciated above
is firmly rooted in our continuing policy interventions which I highlighted in my
policy statement, last year. We have made great progress towards our goals set
in the last policy statement and we feel confident that as we complete major
programmes initiated last year we shall initiate new programmes that will be built
on our past success.
Our vision of 2003-04, spread over a three year Medium Term Budgetary
Framework, aimed to reduce poverty in the Punjab by focusing on:
9 Governance reforms
9 Social sector investments
9 An economic growth strategy (led by the private sector)
The under-pinning of this entire framework was the understanding that
delivery of services to the people must improve. There can be no compromise
on this over-riding role of the Government. The highlights of our achievements
(and under achievements) in each area are as under: -
GOVERNANCE REFORMS
Our governance reforms revolved around the following principles:
• Performance based governance with focus on outcomes,

achievements and results.
• Creating a nexus between resource allocation and effective

delivery.
• Passing on the benefits of macro-economic stability to the

people through focused investments.
• Believing that good governance is good politics.
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MANAGEMENT OF POLITICS
In pursuit of the above principles we have managed our politics in

accordance with the democratic principles enshrined in the Constitution. The
highlights are:
• Accepting the parliamentary role of the Opposition.
• Abstaining from the politics of revenge.
• Avoiding the use of Ordinances and carrying out the business

of legislation through the Provincial Assembly.
¾ In the parliamentary year 25.11.2002 to 3.1.2003 the

assembly met for 73 days over 12 sessions against the
required number of 70 days. 14 official bills were passed
by the assembly during its first year.
¾ In the parliamentary year 25.11.2003 till date the assembly

has already met for 34 days against the prescribed 70 days
and has passed 19 official bills in this period. (Only one
Ordinance relating to the grant of university status to
Forman Christian College was necessitated)
¾ No case of relaxation of rules was entertained.
DEVOLUTION AND LOCAL GOVERNMENTS
In my policy statement I had spoken of the great potential of the local

government system to provide services to the people and address development
issues at the grass root level. Some of the highlights in FY 03-04 are:
• Timely and complete transfer of resources to the Local

Governments in accordance with the award of the Provincial
Finance Commission.
(Rs. in billion)
Local Governments FY 02-03 FY-03-04 Percentage increase
District Governments 50.859 55.750 9.62%

Tehsil Municipal 6.793 7.445 9.60%
Administrations
Union Administrations 2.702 2.754 1.92%
Total: 60.354 65.949 9.27%
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Additional Support to Devolution
• Transfer of “tied grants” amounting to Rs.5.4 billion under the

Punjab Education Sector Reform Programme to the District
Governments. (Similar amounts would be transferred in the
next financial year.)
• Transfer of extra budgetary grants of Rs.1.25 billion to the

Local Governments for accelerated interventions in education,
health, road building, village electrification and water supply
and sanitation.
• Investment of Rs.3.45 billion under the Tameer-e-Punjab

Programme in areas under the jurisdiction of the local
governments.
The local government system still requires a lot of nurturing. Capacity
issues in the local governments are a cause of concern and needs focused
attention. That is why despite our policy of granting TMAs financial relief by way
of debt write off and straight transfer of the proceeds of UIP Tax, only 4 amongst
the 122 TMAs took benefit of the Provincial policy. In the coming financial year
we would re-focus our attention on this aspect to improve the financial position of
the TMAs, creating sufficient resources for them to discharge their civic
responsibilities:
Further Measures
• Capacity building support for the local governments shall be

provided through the Decentralization Support Programme at
a cost of Rs.492 million in the next three years.
• Matching development grants would be available for TMAs

through the Rs.5.8 billion Punjab Municipal Development
Fund.
• Additional financial support of over Rs.7.4 billion would be

made available to 21 select TMAs under the Southern Punjab
Basic Urban Services Project.
ACCESS TO JUSTICE
In my policy statement I had stated that the strength of a society lies in the
quality of its system of justice which includes judicial courts, jails and the police. I
had expressed my resolve to provide over Rs.6 billion in the access to justice
17
sector in the next three years, in addition to the normal budget. I think that our
estimates were rather conservative and we may be required to invest additional
monies amounting to Rs.12 to 14 billion in the next two years. I base my
estimates on the current year’s additional allocations amounting to over Rs.5
billion.
(Rs. in million)
Access to Additional Allocation Additional Allocation Total
justice (Current 03-04) (Development 03-04) (03-04)
Judicial Courts 431.22 445.00 876.22
Police 3063.62 767.34 3830.96
Jails 315.66 324.00 639.66
Total: 3810.50 1536.34 5346.84
PHYSICAL HIGHLIGHTS
Judiciary
• Office and residential accommodation of judicial officers is

being improved under the Access to Justice Programme.
• A special judicial allowance at the rate of Rs.5,000 per month

for District Judges, Additional District Judges, Senior Civil
Judges and Rs.4,000 per month for Civil Judges and Judicial
Magistrates has been approved.
• The facilities for the litigants are being improved under the
Access to Justice Programme.
• Process serving by the courts is being improved.
• An independent prosecution service is being established.
• Consumer protection courts are also being established.
• A legal help line for the general public is being considered for
establishment in all districts.
Police
• As a first step to eliminating the “Thana Culture” 175 fully

equipped Police Patrolling posts would be established by July
2004 to make the highways safe for the public.
18
• These patrolling posts would be manned by offices and staff

possessing better qualifications and enjoying salary and
allowances equivalent to the Motor Way Police.
• The transport and equipment needs of the police have been

augmented and the process would continue in the next three
years.
Our resolve to move towards a secure society remains unflinching.
Jails
• Over crowding in jails is being addressed through

establishment of new jails/barracks at districts of T.T. Singh,
Vehari, Layyah, Bhakkar, Pakpattan and Okara.
¾ Additional barracks for the inmates are being established in

11 other jails.
• Considering that jail inmates are also human beings, special

attention has been given to their physical well being.
¾ Diet scale for prisoners was enhanced from Rs.15 per

prisoner per day to Rs.20. (Additional impact of Rs.53
million per annum.)
¾ The rate of health cover per prisoner per day has been
enhanced from 0.56 to Rs.2.00. (Additional impact of
Rs.27.93 million per annum.)
¾ 16 ambulances have been provided in 16 jails of the

Punjab at a cost of Rs.8.8 million.
¾ Operation theatres/pathology laboratories have been made

operational in 8 jails of the Punjab.
¾ Electric Water Coolers and improved toilet facilities have

been provided in all the Jails in Punjab.
CIVIL SERVICE REFORMS
In my policy statement I had expressed the commitment of my

government for the creation of a performance oriented public service. You would
be glad to note that the Punjab Management Service has been formally
established and requisitions for recruitment have been placed with the Punjab
Public Service Commission. We would continue our support to the Commission
as we believe in transparent and merit based recruitments. For posts falling
19
outside the purview of the Commission, we have promulgated a merit based

recruitment policy in the Province. The process of recruitment to vacant posts is
continuing on a selective basis, given the resource constraints. This year we
allowed recruitments against 25 thousand vacant posts. In the next financial
year we expect to fill in 30 thousand vacant posts, especially in education and
health sectors. The policy of making recruitments primarily in the contract mode
would continue.
The issue of capacity building cannot be over emphasized. In the

Management and Professional Development Department we are embarked on
intensive pre-service and in-service training programmes for officers and officials
of the Punjab Government, in Corporations and Local Governments. Till date
3,745 participants have attended 120 different training courses at the
Management and Professional Development Department. Further support in
training is being rendered by the Staff College, the NIPA Lahore, the Civil
Services Academy and the Audit & Accounts Institute.
Accountability
For quite some time the issue of accountability of employees of the

Provincial Government was being managed by the National Accountability
Bureau. We deemed it appropriate to bring the issue of accountability into the
Provincial focus. Accordingly the Punjab Anti-Corruption Establishment has
been re-vitalized through the establishment of additional Anti-Corruption regions
at Sargodha, Bahawalpur and Gujranwala to complete coverage for the entire
Punjab. The staff strength of the Anti-Corruption Establishment has been
augmented and the organization is today well equipped to discharge its
responsibilities in an effective manner. A total additional investment of Rs.72.5
million has been made.
The supporting pillars of our governance reforms are financial and fiscal
reforms, reform of the planning processes, improved implementation and better
monitoring and evaluation. I however, propose to take up these issues towards
20
the end of my address as our initiatives in these areas cut across governance
and social and economic policies.
INFORMATION TECHNOLOGY
We live in an age of information! Without using information technology we

cannot cope with the service demands of the people. Information and
Communication Technology infrastructure will be developed in order to realize e-
government in the Punjab province. The vision is to use information technology
for government’s business visions which is to enable and support an efficient,
flexible, responsive and innovative public service delivery with enhanced internal
efficiency and improved decision support system. We believe that good
governance cannot possibly come without building back office operational
efficiencies. The current paper-based manual processes have become
cumbersome due to the sheer size and number of files which are not easily
manageable. In order to bring about a positive change in this direction my
government has already initiated some concrete steps. All the departments are
gradually being provided with an IT enabled work environment. Investment is
being made in provision of computers and peripherals, networking and
databases that form foundation for management information system. Employees
are being prepared through training to adopt IT culture in their offices. Physical
infrastructure is being built with projects like
9 Punjab Intranet
9 Punjab Government’s Portal
9 Central Data Warehouse
9 Computerization of Land Revenue Records
9 Motor Transport Management Information System
With these facilities in place an important step would have been taken
towards hassle-free provision of online services to the citizens. It may take little
longer to create IT culture in the government but we are moving towards that
goal. It is my vision that the Punjab Government Portal, gateway to all the
21
departmental websites with facility for online submission of complaints, requests,

suggestions and financial transactions leading to electronic services will bring
transparency in the administrative and financial management and service culture.
SOCIAL SECTOR INVESTMENTS
In my policy statement I had talked about the “poverty of deprivation”.

This meant lack of access to education, health and family planning facilities,
water supply and sanitation and other civic amenities. Experts believe that
unless quantum jumps in investment in these areas are not made, there may be
little impact in reducing the poverty of deprivation. In essence, investments in the
social sector, especially in the public sector, benefit the common man. Since my
government is committed to improve the lot of the common man, we embarked
on a focused and planned investment in the social sectors. Let me share with
you the results of our one year’s effort.
Education
In the public sector education system we targeted the low enrolment, high
drop-out rates, low literacy levels especially amongst females, poor student –
teacher ratios at the level of elementary education, in the first instance. We
noted that of the 10.97 million out-of-school children in the Punjab, 6.09 million
were in the age group 5 to 12 years, meaning thereby that the problem of out-of-
school children was most acute at the elementary level. It was also notable that
gross enrolment in government schools at the elementary level was actually
declining in the Punjab since 1996-97. Studies revealed that inadequacy of
infrastructure in schools, an inability to afford the costs of elementary schooling
by pupils, further aggravated by a gender bias were the key impediments to
improved attendance. You may recall that in the first cabinet meeting of my
government we decided to make education free in all government schools up to
matriculation. This apparently was not enough. Under the Punjab Education
Sector Reform Programme we broke away from the traditional mode of
incremental investments in the education sector. In a three year investment
22
programme we planned to invest over Rs.21 billion in elementary education, over

and above the normal budget. In the year under review we made an investment
of Rs.7.2 billion and proposed an additional investment of Rs.8.3 billion in the
next financial year.
PROGRAMME HIGHLIGHTS
Activity-1. Provision of missing infrastructure to 63,000 schools in the Punjab.
• The total number of missing facilities given in the District

profiles of all 34 districts was 118,274.
• In the first year of the Programme Rs.5 billion were given to all
the districts @ Rs.147 million each.
• The total missing facilities prioritized by the districts for the first
year were 36,911 and are under completion.
Activity-2. Distribution of free text books.
• 725,000 students from class Katchi to class–V in the

government schools of the Punjab were delivered free text
books at a total cost of Rs.494 million.
• In the next financial year we shall extend this programme to

classes VI to VIII in the government schools, at a total cost of
Rs.600 million.
Activity-3. Stipends to girl students of middle schools in 15 low literacy

districts.
• Rs.350 million were allocated for the first year. Expenditure to

be incurred till end June would be Rs.334 million.
• In order to check the drop out rate of girls in middle school,

Rs.200 per month per girl is being given as stipend.
• Every girl studying in Class 6th 7th & 8th in a government school
is qualified provided her class attendance is 80%.
• The target population of such girls in the 15 low literacy

districts was 175,000.
Activity-4. Punjab Education Foundation.
23
• Punjab Education Foundation has been restructured, with

reduced bureaucratic control and allocating Rs.100 million for
the first year.
• 70% of the funds would be lent to the rural and poor areas.
Activity-5. Recruitment of new teachers.
• 13,000 new teachers have been recruited on contract on

school specific assignments in the current year at an annual
recurring cost of Rs.700 million.
Activity-6. Teacher training.
• Against a programme target of training of 150,000 teachers, a

training cycle of 90,000 teachers has been completed.
Activity-7. Re-vitalization of School Councils.
• An amount of Rs.500 million was earmarked for disbursement

to School Councils in the current financial year.
• 50% membership of the School Councils comprises parents

with parent acting as Council Chairman.
• A pilot project in 6 districts (Attock, Chakwal, Gujrat,

Faisalabad, Vehari and R.Y. Khan) covering 2400 schools is
being undertaken in the current financial year.
Activity-8. Awareness campaign.
• A mass awareness campaign to sensitize parents and the

general public was launched on March 4, 2004.
Activity-9. Monitoring and evaluation.
• A programme monitoring and implementation unit has been

established.
• Computerized monitoring techniques provide information on

real time basis.
• Impact assessment studies, which fell due, are under way.
Preliminary estimates of a single year’s effort reveal a 7% increase in

enrolment at primary level and a 6% increase at the middle level. The net effect
of the increase in enrolment at primary level, due to our efforts, resulted in an
24
increase of 5,24,448. In the next financial year we plan to develop the necessary
linkages between primary and middle level education by dedicating Rs.2 billion
for up-gradation of schools from primary to middle and higher secondary level. In
addition, laboratory facilities in higher secondary schools would be provided
through a phased programme to improve the over all education services.
HIGHER EDUCATION
I am afraid we have not been able to focus on higher education in the

manner as we have done in the field of elementary education. We are still
continuing with incremental budgetary programmes to fund this sector. The
national policy on higher education aims to transform higher education
institutions into world class seats of learning. While we subscribe to this ideal,
the way forward is not incremental but holistic. The random opening of
universities, without a supporting infrastructure and teaching cadre, an absence
of research facilities make out a strong case for a comprehensive strategy to
create a higher education service which fosters quality education, scholarship
and research and provides manpower of the highest quality for staffing positions
in public and private sector. The incremental achievements in this sector were:
• Opening of second shifts in government colleges at inter level to
provide greater access.
• 10% increase in the number of seats in the government colleges

in the Punjab.
• Establishment of home economics colleges at Multan and

Gujranwala.
Surely, these efforts are insufficient to meet our goals. This sector would
therefore require the framing of a comprehensive strategy with clear linkages
with manpower planning.
SPECIAL EDUCATION
In my policy statement I had spoken of our focus on the needs of the

special education sector. I had promised to bring our disadvantaged children into
the main stream of society.
25
• To give focused attention to the welfare of children with

disabilities an independent Department of Special education
was established on 01.10.2003
• A block allocation of Rs.400 million was provided as a

supplementary grant to improve the facilities for education and
training of Special Children.
¾ At present only 49 institutions of special education are

working in public sector, mostly at district level.
¾ There are about 6 lac special children of school going age in

Punjab and only 4200 disabled children are getting
education in these institutions.
• 90 additional centers of special education (primary level) are

being created to cater for all the disabilities at tehsil level.
• To give incentives to the teaching staff of special education,

their salary has been doubled.
• Mobility is one of the major problems of special children. To

provide pick-n-drop facility to the special children, provision of
new buses in all special education institutions is being made.
¾ At present only one degree college of special education is

working in private sector.
¾ In public sector only one inter college for deaf is working at

Lahore.
• In order to make a start in this direction a Degree College for

Special Education at Lahore is being established.
¾ The existing buildings of special education institutions are

not in presentable condition.
¾ The parents prefer to send their children to private

institutions.
• In order to improve the condition of buildings of special

education institutions, an allocation of Rs.100 million has been
made in the current financial year.
¾ A school of special education caters for only one disability.
• In order to extend facilities of education to special children,

arrangements for provision of 4 disabilities in the existing
schools for special education are being made.
26
¾ The existing Computerized Braille Printing Press is 10 years

old.
• Funds for the purchase of a new computerized Braille Printing

Press have been provided. This computerized Braille Printing
Press will have the advantage of printing Braille and English
simultaneously. The books to be published by new press can
be read by blind as well as sighted people.
¾ About 3300 hearing impaired students are studying in

special education institutions.
• Hearing aids to all hearing impaired students shall be provided

on a permanent basis, free of cost by July, 2004.
• The gaps in staff coverage in Special Education Institutions

has been met by filling in 226 vacant posts. The
recommendations from PPSC in respect of 64 teaching post of
BS 16 & 17 are likely to be received shortly.
• Use of play grounds of Sports Department by special children

for 2 hours in the forenoon has been arranged.
• An allocation of Rs.23 million was made for training of

teachers of Special Education Institutions.
We do not believe in a one-off effort. An additional amount of Rs.400

million has also been provided for this sector in the next year’s development
programme. We plan to revive job quotas for the disabled in the public sector.
To encourage the private sector managed schools of special education a block
grant of Rs.100 million shall be dedicated out of the composite block allocation
for this sector, in the next financial year.
HEALTH AND POPULATION WELFARE
In my policy statement I had spoken of the inadequate coverage provided

by our health care system to our population both in terms of quality and quantity.
While our promised allocations to this sector, remained on track and we
earmarked in excess of Rs.3.5 billon for the health sector and close to Rs.1
billion for the population welfare programme, our successes were only
incremental. I have now directed that a comprehensive health and population
27
welfare management strategy be drafted to develop a workable and sustainable

action plan for this sector.
The above notwithstanding, we have achieved some successes in the

health sector. The highlights are:
• During the current financial year 2003-04, additional funds of Rs.1

billion were provided to the Health Department for.
• Strengthening of Emergency Medical Services
Emergency Medical Service in all Autonomous Hospitals of Punjab

are being strengthened so that the people living in big cities near
these hospitals can get improved, modern and up-dated emergency
services.
• Emergency Ambulance Service

Punjab Emergency Ambulance Service is a pilot project in Lahore
City for providing modern, effective and efficient services to the
people of Lahore City. This will be replicated in other big cities of
the Province.
• Multan Institute of Cardiology at Multan
An Institute of Cardiology at Multan on the pattern of Punjab

Institute of Cardiology at Lahore to cover the population of southern
Punjab was launched at a cost of Rs.1 billion. The Project would
functional in 2004-05.
• Missing Facilities in BHU and RHCs
In order to lay the framework of a comprehensive health care plan

needs assessment for providing missing facilities to about 3000
BHUs and RHCs has commenced. It will result in an investment
programme of Rs. 4 billion over the next 3 years starting from
2004-05.
28
This programme would be a major initiative in the Health sector, at

the primary care level and would reduce the poverty of deprivation
of health services in the rural areas.
• Creation of Burn Unit at Jinnah Hospital, Lahore.
Agreement was reached during the current year with the Federal
Bait-ul-mal Department for creating a Modern Burn Unit at Jinnah
Hospital. Lahore. The Project will be started during 2004-05 at a
cost of Rs.150 Million. This will provide modern burn care services
to burn victim’s most of whom are poor women.
• Lady Health Workers
Sixteen thousand (16000) village based Lady Health Workers will

be added to the existing 35000 Lady Health Workers in the
Province to provide coverage to uncovered rural areas in Public
Health Care as well as family planning.
• Public - Private Partnership
Public – Private partnership was successfully implemented in

Rahim Yar Khan District where management of BHUs was
entrusted to the Punjab Rural Support Programme. The initial
results have shown more than a 100% increase in utilization of
these facilities. It will be evaluated and replicated in at least six
other districts during 2004-05 to enable larger number of poor
people to benefit from this management innovation.
• College of Nursing.
¾ Graduate classes in the first College of Nursing in the Punjab
Province have been started at Allama Iqbal Medical College.
¾ Another College of Nursing shall also be opened in Nishtar

Medical College Multan during 2004-05. This will provide a
boost to Nursing education and profession in the Province.
29
• Free Medicines in Emergency

¾ Efforts were made to provide completely free medicines and
treatment in emergency at all levels of health care in the Province.
This effort and strategy will continue for the benefit of the poor.
• Autonomy to Teaching Hospitals.
¾ The process of granting administrative autonomy to Teaching

Hospitals shall be strengthened by allowing them greater say and
authority in recruitments and purchases.
We would also embark upon a programme of upgrading Tehsil

Headquarters Hospitals, in a phased manner. Allocation for this purpose has
already been made in the next year’s development programme.
Public Health (Water Supply and Sanitation)
It is now universally accepted that the best interventions in preventive

health are in the field of water supply and sanitation. Since under the devolution
of power plan this function was assigned to the Tehsil Municipal Administrations,
the Provincial Government could not pay enough attention to this sector. We
have now created a provincial resource base for extending capacity support to all
TMAs in the Punjab on a free of cost basis. This resource base would also
execute schemes as a part of our accelerated social development programme
and would in due course be merged with the capacity of the TMAs. In the next
financial year we propose to allocate about Rs.3 billion to this sector to provide
enhanced water supply and sanitation facilities to 10,25,000 people. This
programme would continue in the subsequent years.
Direct Interventions for Poverty Alleviation
While we are addressing issues relating to the poverty of deprivation of

services let me share with you some data on the poorest of the poor. These are
the people living below poverty line i.e. these of our people do not have enough
food to sustain and need their daily calorie needs.
30
ESTIMATED POPULATION BELOW POVERTY LINE (1993-1999)

(Figures in Million)
PROVINCE 1993 1999 %age change
PUNJAB 17.2 25.9 51%
SINDH 6.6 8.6 30%
NWFP 5.6 8.0 43%
BALOCHISTAN 1.7 1.6 - 6%
TOTAL: 31.1 44.1 42%
DISTRIBUTION OF POPULATION BELOW POVERTY LINE (1993-1999)
PROVINCE 1993 1999

PUNJAB 55.3% 58.7%
SINDH 21.2% 19.5%
NWFP 18.0% 18.2%
BALOCHISTAN 5.5% 3.6%
TOTAL: 100% 100%
The above data reveals that:
• Poverty is growing in Pakistan and the number of people

below the poverty line increased by 42% between 1993 and
1999
• Growth of poverty in Punjab during this period was an

alarming 51%
• The growth of poverty in Punjab was the highest in

comparison with other provinces
• Of the number of people below the poverty line 58.7% live in

the Punjab
While the Economic Survey, 2004, released by the Government of

Pakistan highlights a decline in poverty, we need to make concerted efforts to
reduce poverty, even further. In my policy statement I had expressed the resolve
to address the needs of the poorest of poor in a more direct manner. I had
stated that our efforts in this field would revolve around reducing income poverty
through the provision of micro-credit, targeted interventions through monthly
stipends and undertaking schemes of permanent rehabilitation of individuals and
families from Zakat & Bait-ul-Maal funds. I had expressed the resolved to
31
disburse in excess of Rs.10 billion in the next three years under these heads.
Let me share with you the results of our actions in the financial year 2003-04.
Zakat
• Permanent Rehabilitation Package. Aims at one time grant to the

Zakat Mustahq families to rehabilitate them making them economically
self sufficient once for all and striking out their names from the list of
Mustahqeen-e-Zakat.
As on 31-3-2004
Heads Amount Amount No. of
allocated Disbursed Beneficiaries
Permanent Rs. 1414.211 Rs. 1339.987 102800
Rehabilitation million million (upto 31-
Package 3-2004)
Monthly Stipends . As on 31-3-2004

(Rs. In million)
Guzara allowance 611.396 606.173 363919
Educational 183.419 98.709 84022
Stipends
Stipends to 81.520 35.500 18790
students to Deeni
Madaris
Other Heads. As on 31-3-2004

(Rs. In million)
Health care 81.139 35.504 65614
Social Welfare/ 40.759 29.405 5881
Rehabilitation
Marriage Grant 40.759 29.651 2966
32
• Vocational Training Institutes. Government of Punjab has introduced a

new concept for imparting training to the young boys & girls of Zakat
Mustahiq families enabling them to secure employment as skilled
workers in the private and public sectors and earn their livelihood in an
honourable way. So far 58 Vocational Training Institutes have been
established in the province; establishment of 29 Vocational Training
Institutes is in the pipeline with the target of establishing 120 such
institutes upto 30-6-2005. The achievement during the current
financial year is given as under:-
As on 31-3-2004
VTI (MORA Rs.263.400 Rs.263.400 8690 (+ 3310)
Technical million million 12000
Scholarships)
The cumulative effect of our efforts in the Zakat sector in financial year
03-04 (up to 31st March, 2004) were a disbursement of Rs.2.4 billion affecting
6,56,000 beneficiaries.
Bait-ul-Maal
The achievements in the Bait-ul-Maal sector in the outgoing financial year

were:
• Deserving students (4278) were given scholarships to the tune
of Rs.19.012 million.
• Patient Welfare Societies were provided Rs.3.36 million for

purchase of equipment such as Dialysis, Cardiac monitor and
Blood Cell Separator machines for the treatment of 772
patients.
• 440 NGOs were provided grant in aid to the tune of Rs.
27,991,974/-.
• Under a scheme for financial assistance of poor families for
marriage of their daughters 2210 poor girls were provided
Rs.9,347,176/-
• Under the provision of interest-free-loan for self-employment to
widows 255 persons were provided Rs.3,381,523.
33
Micro-credit through Punjab Rural Support Programme
• Micro-credit facilities were provided to 33,000 individuals up to

April, 2004 involving a total outlay of Rs.347 million.
Access to Physical Assets
The highlights of the two schemes viz Land to Landless and Shelter to the
Shelterless are as under:
Land to Landless.
• Land worth Rs.316,000,000/- approximately was earmarked for

allotment to more than 7000 landless tenants in the first phase.
• 5,000 landless tenants have already been allotted 12.5 acre land each
in Muzaffargarh, Bahawalpur and R.Y. Khan.
Highlights of the scheme are:
¾ Provision of 12.5 acres of agricultural land per family.
¾ Landless tenants / small land owners will be eligible.
¾ A nominal price Rs.5 per PIU, payable in easy installments.
¾ Possession / conveyance deed delivered to allotees on payment of
first installment.
¾ Subsistence holding (12.5 acres) capable of sustaining a family.
Shelter to the Shelterless
• 1,20,000 five marla plots have been earmarked for distribution in a

phased programme.
• Physical distribution would commence from July 2004.
Highlights of the scheme are:
¾ Provision of a 5 marlas plot per family.

¾ Non-proprietors in rural areas are eligible.
¾ These plots will be allotted free of cost.
¾ Grant of proprietary rights on completion of house.
Grant of proprietary rights and development of Katchi abadies in urban

areas is also receiving the special attention of the government.
34
Social Welfare
Our primary intervention in the social welfare sector in financial year

2003-04 revolved around protection to the destitute and neglected children.
• The Punjab Destitute and Neglected Children’s Act 2004 for the
rescue, protective custody, control, care, treatment and
rehabilitation of destitute and neglected children in the Province
was promulgated.
• A bureau of child protection has been established.
• The bureau would be fully functional from July 2004.
Other initiatives in the social welfare sector included:
• Establishment of a Dar-ul-Amman at Lahore at a cost of Rs.9

million during the current financial year.
• The establishment of four centres for women in distress (PANNAH)
at Lahore, Rawalpindi, Multan and Bahawalpur at an estimated cost
of Rs.10 million.
• 133 Community Development Projects were completed with the
help of Community based Organizations and around 5 million men,
women and children were served through these programmes.
• Under the programme, Employment & Rehabilitation of Orphans,
Widows & Destitute, 15240 have been benefited.
• Against an annual target of 300, 346 new NGOs were registered
and 110 inactive / defunct NGOs were reactivated.
• National Council of Social Welfare (NCSW) and Punjab Social
Services Board (PSSB) released grants of Rs.4.800 million to 376
NGOs.
• During current financial year 234,771 patients were provided
medicines, blood donations and artificial limbs in Government
Hospitals out of Zakat funds through Medical & Social Services
Project.
• Under the programme for rehabilitation of handicapped, disabled
and mentally retarded persons, 6549 disabled persons were served
and provided employment, financial assistance, artificial limbs etc.
• Punjab Welfare Trust for the Disabled (PWTD) provided assistance
to the tune of Rs.18,920,000/- to 53 institutions / NGOs.
35
Minorities
In accordance with the Principles of Policy enshrined in the Constitution of

Pakistan the welfare of the minorities is a charge on the State. We plan to
support the welfare of the minorities through an annual allocation of Rs.100
million which would progressively grow to over Rs.300 million per annum. I have
also passed instructions to place schemes relating to the welfare of the minorities
in the Provincial ADP for the next financial year.
Women Development and Gender Reforms
While a separate Ministry for women development was created in this

financial year, I realized that gender reforms cut across all sectors. My
government can take credit for taking the lead in approving the gender reform
action plan (GRAP). This programme would entail of cost of Rs.177 million in the
next financial year for undertaking reforms in the following each area:
• Political participation of women
• Institutional reforms
• Women public sector employment reforms
• Gender sensitive budgeting and planning
• Capacity development
Other major achievements were:
• Recruitment of women in police and prisons department

• Construction of separate barracks for women in different jails
• Deputing lady doctors to visit female prisoners
• Establishment of socio-economic and rehabilitation centers for
women prisoners in 10 jails in Punjab at a cost of Rs.7.11
million
• Training of women NGOs and Advocacy programme at a total
cost of Rs.5 million
• Establishment of shelters (Homes) for needy women at large
district headquarters at a total cost of Rs.20 million
36
• A law to provide relief to victim of domestic violence and to

ensure to protection of women is being promulgated titled “The
Punjab Prevention of Domestic Violence Act”
• 22,000 women councilors have retained through three days
training workshop held all over the Punjab.
• A total of 17000 women councilors were trained through 500
training sessions held under Women’s Political Participation
Project (W3P) with collaboration and financial support from
Ministry of Women Development, Social Welfare & Special
Education, Government of Pakistan.
• Around 800 District Level Women Councilors have been trained
in computer literacy.
• Under “Voicing of the Poor”, empowering rural women in 10
Tehsils of Punjab, 25000 women were enrolled (between 15 to
25 years of age) for 8 months training program in literacy, skill
development. The programme successfully ended in June,
2004.
ECONOMIC GROWTH STRATEGY
In my policy statement I had touched in brief on our economic growth

strategy. This aimed at creating a nexus between agriculture, industry and
business. I also spoke of the need to improve productivity, to create employment
opportunity and improve incomes. I had also spoken of the lead-bearing role of
the private sector in economic development and complementary efforts being
made by the public sector as well as creating public private partnerships. By the
grace of God we have been able to evolve a more comprehensive economic
vision. However, let me share with you the details of our efforts in the outgoing
financial year.
Agriculture
Let me remind you of what I had stated last year.
“Agriculture being the main stay of Punjab’s economy, the promotion of

agriculture is the major priority of my government. Our focus is on
increasing farmer profitability, reducing the cost of production to the extent
possible, providing access to affordable credit, improving the delivery of
extension services, rapid development of agriculture research and
creation of enabling marketing systems. We have already set the ball in
motion. My government took the lead in substantially reducing mark-up
37
on agricultural loans through the Bank of Punjab, an initiative followed by

the federal government”
We also raised the ceiling of exemption from Agriculture Income

Tax from 5 acres to 12.5 acres, believing fully that subsistence farmers
needed special care. A flat rate for Abiana was imposed at the rate of
Rs.50 per acre for Rabbi crops and Rs. 85 per acre for Kharif crops. In
the process the farmer was released from the clutches of the Irrigation
Patwari.
In line with my policy statement we allocated over Rs.2.5 billion to

the different wings of the Agriculture Department in the outgoing financial
year.
A summary of activities of different wings during 2003-04 is as follows:
• EXTENSION
¾ An aggressive program for training of farmers was launched for

transfer of advanced technology for wheat production to
farmers. A total of 618 teams were mobilized which trained
8,69,897 farmers in 21,911 villages. A total of 5,34,445
brochures were distributed among the farmers.
¾ For effective transfer of cotton production technology to farmers,

333 teams were mobilized which trained 5,94,739 farmers in
9,714 villages. During these training sessions, 255,084
brochures were distributed.
¾ For educating the farmers in sugarcane production technology,

410 teams were mobilized which trained 3,83,500 farmers in
10,560 villages, distributing a total of 78,493 brochures in the
process.
¾ For effective transfer of rice production technology to the

farmers, 243 teams were constituted which trained 2,75,792
farmers in 8,820 villages, distributing 3,99,641 brochures in the
process.
¾ A telephone-based help-line is also being operated to provide

quick and problem–specific response to the farmers’ queries.
During the year 2003-04, 6840 enquiries were received (upto
April, 2004) from the farmers and responded to after taking
necessary action on the same day.
38
• RESEARCH
¾ During 2003-2004 the Provincial Seed Council approved cotton

variety BH-160 for general cultivation in the Punjab. The variety
has high yield potential, better fibre qualities, early maturity,
heat tolerance and virus resistance.
¾ Advisory service to the farmers was rendered by analyzing

89752 soil / water / fertilizer / plant samples for efficient use of
inputs.
• MARKETING
¾ The Government has addressed the weak area of agricultural

marketing by appointing a full-fledged Minister and Special
Secretary Agriculture Marketing to exclusively deal with the
affairs of agricultural marketing. An autonomous body is also
being set up for introducing reforms in the marketing system to
exploit the trade potential of our products in the international
market.
I must however admit that agricultural research and agricultural marketing

are two weak areas of our economic management. As would be obvious from
my economic vision we are already seized of this problem and are making
concerted efforts in these sectors. Some of the initiatives in the agricultural
marketing sector are as under:
• Process of restructuring of the marketing system has been

initiated.
• A survey of markets which need shifting is under process.
• Technical assistance from ADB worth 0.78 million dollars for the
improvement of marketing of horticulture and dairy products is in
pipeline.
• 8 major markets have been interconnected through MIS to

improve market information service.
• Information automation scheme has been launched at a cost of

Rs. 20 million.
• Crop reporting service is going to be strengthened at a cost of

Rs.27 million.
39
• Post Harvest Research Centre is being strengthened at a cost

of Rs.12 million.
• Pesticides residual testing lab is going to be established at

Sargodha at a cost of Rs.103 million.
• Early estimation of potato crop for timely export has been

arranged by the agriculture department.
• Horticulture Development and Export Boards has been

established.
• Establishment of export processing zones at Sargodha and

Multan/ Rahim Yar Khan is under active consideration.
• WTO cell has been established to watch its implications.
It is a part of my vision to create and regulate a model agricultural commodities

marketing system that facilitates fair pricing and assured flow of agricultural
commodities from farms to end consumers / retailers.
We also plan to strengthen agricultural research by hiring foreign

researchers to take over specific projects in the following areas: -
Cotton
Wheat
Livestock
Vegetables
• CREDIT AVAILABILITY
¾ Availability of credit from Bank of Punjab during the period from

July, 2003 to February, 2004 increased by 33% as compared to
the corresponding period of the previous year.
¾ The credit was made available at an interest rate of 9% which is

the lowest in the country for agriculture credit.
¾ From July 2004 the interest rate of credit by Bank of Punjab for
agricultural production loans would be reduced to 8% from the
existing 9%.
¾ The interest rate for tractor loans given by the Bank of Punjab
would be reduced to 10% from the existing 11% from July 2004.
¾ The government provided transport subsidy on export of potato

to stabilize prices in order to save the growers from financial
40
loss. An amount of Rs.73.00 million was provided by the

Federal Government whereas the balance amount of Rs.10.000
million was provided by the Government of Punjab.
As a result of the above initiatives and the Industry of our farmers, the
production targets for cotton of 7.702 million bales were achieved, a record
production of 2.871 million tonnes in rice crop was witnessed, Sugarcane
production was an all time high at 34.023 million tonnes. Wheat production
however was hit by abnormally high temperature at the time of grain filling and
rains at the time of harvesting. None the less the farmer received a price of over
Rs. 350 per 40 kg for his crop.
Irrigation
I had observed last year that the maintenance of our irrigation system and
the adoption of water conservation methods were critical to sustaining our
agriculture. The major achievements in the irrigation sector are given below:
• Imposition of Aabiana in the flat rate mode
¾ The imposition of Abiana in the flat rate mode has been well received
by the farmer community. The age old control of the Nehri Patwari
has been eliminated. Collection efficiency of Aabiana is being
witnessed. 50% rebate in Aabiana was granted to farmers at tail end
to give relief against drought conditions.
• Revision of Yardstick for maintenance of Irrigation System

¾ The yardstick for M&R of the irrigation system which was approved in
1992 has recently been rationalized. As a result of this, additional
funds under M&R would be available for sustained maintenance and
upkeep of the irrigation system as below:
Component Additional O&M Allocation

(Million Rs)
Canal System 238
Embankments and Flood Works 145
Drainage 49
Lift Schemes 62
Buildings 84
Total: 578
41
These funds will be utilized through well formulated Work Plans which will
be implemented under strict supervision and monitoring. This would
progressively improve upkeep and maintenance of irrigation system which
is vital for our agrarian economy.
• Mega Projects under Federal PSDP

¾ Irrigation System Rehabilitation Project Phase -1
The project has been approved at a cost of Rs 19.5 billion. During the year
2003-04, funds amounting to Rs 350.0 million have been released and the
work on rehabilitation of Eastern Sadiqia has been initiated while work on
other sub-projects viz: LJC System, Southern Branch and Main Branch
Lower is being taken up. The sub-projects of rehabilitation will be
progressively taken up on allocation and receipt of funds from the Federal
Government.
¾ Punjab Barrages Rehabilitation and Modernization Project Phase.I

There are 14 barrages on rivers in Punjab which irrigate 21.50 million
acres of land through 24 canal system having 23184 miles length of
channels. These barrages are old and the river morphology has changed
due to transfer of water of three eastern rivers to India and construction of
storage reservoirs. Under phase-I of the project Rs.745.0 Million have
been allocated. The project has been launched and initially emergent
repair works of barrages have been taken up during the current year.
Feasibility study of six barrages under this phase is also in progress.
Taunsa Barrage which is the most vulnerable barrage has been put on
fast-track basis for its rehabilitation / modernization under World Bank
financing during FY 2004-05.
¾ Lining of Irrigation Channels (Distys / Minors) in Punjab

The project envisages lining of 8873 canal miles, which has been
approved at a cost of Rs 31.0 Billion. The project has recently been
launched and will be implemented under a phased program.
Lining of Canals for efficient conveyance and for reducing losses has also
been undertaken under the National Drainage Program and Provincial
ADP. During the current financial year 2003-04, lining of 20 miles under
NDP, 80 miles under ADP and 18 miles under the mega project of lining is
being carried out. This would facilitate common farmers for irrigating land
efficiently and over coming tail shortages.
¾ Remodelling of LCC System under National Drainage Program

The project was approved at a cost of Rs.2.4 billion. Out of total 14
packages under part-A of the Project, work on 11 packages has been
awarded and the work has been initiated since 15th March 2004. With the
implementation of the project, the capacity of canal would be raised from
42
12,243 cusec to 15,500 cusec which would benefit 3.04 million acres area
currently suffering from rotational water supply due to constraint in
carrying capacity of the system. This project is being funded under the
National Drainage Program.
¾ Interventions under National Drainage Program (NDP)

Under this program, out of total 31 sub projects of rehabilitation of drains
(involving 6225 structures) costing Rs.874 million, 27 sub projects have
been approved, 3 projects have been completed, 17 sub projects (RS 338
million) are under implementation and 7 sub projects (RS 213 million) are
under tendering / award. Similarly 13 sub-projects of lining are under
implementation and 47 sub-projects are under tendering/award. Under
On-Farm Water Management component of NDP, out of total 500
watercourses to be improved, 100 watercourses have been completed
while 188 watercourses are under implementation.
¾ Institutional Reforms
Comprehensive planning for effective and efficient farmer’s participation in
the management of irrigation system in the form of Khal and Nehri
Panchayats has been initiated. The work of social mobilization and
establishment of Khal and Nehri Panchayats is proceeding on a fast-track
basis and over 3400 Khal Panchayats and 128 Nehri Panchayats have
been organized in Pilot Area Water Board in the Lower Chenab Canal
(LCC) East Command, Faisalabad. The work of social mobilization and
formation of the Nehri Panchayats is proceeding progressively. Emphasis
is being given to the capacity building of these entities. These Khal and
Nehri Panchayats are being operationalized for participatory management
of canal distributary system. Transfer of management to selective Nehri
Panchayats is also being considered on a pilot basis. In addition, the Pilot
Area Water Board of LCC (East) is also under process of
operationalization.
• Major Achievements under Provincial ADP

¾ Remodeling of M.R.Link project has been implemented at a cost
of Rs 400 million. As a result of this, the capacity of M.R.Link
has been restored from 14,000 cusec to 22,000 cusec. This has
enabled to supply additional canal water of 7,000 cusec,
benefiting 1.5 million acres area in Districts Bahawlnagar,
Pakpattan, Okara and Sahiwal for improved irrigation.
¾ Two projects of “Remodeling B.S.Link” costing Rs 400 million

are under implementation. On completion of the projects, about
3000 Cs additional canal supply shall be provided in the drought
stricken areas of Bahawalnagar / Bahawalpur Districts.
43
¾ Abbasia Link Canal with an initial discharge of 3000 Cs has

been opertionalized. This will improve irrigation supplies in
brackish groundwater areas of Districts Rahim Yar Khan /
Bahawalpur.
¾ A project “Lift Canal to Feed Areas on Left of BRBD Canal”

costing Rs 315 million is under execution. This will irrigate about
68000 acres of land through gravity flow which was being
irrigated through 110 tubewells. This will eliminate a huge
expenditure of running the tubewells.
¾ The project “Knocking Down Old Weir and Training Jammu

Tawi to Control its Confluence with Chenab River U/S of Marala
Barrage Sialkot” has been completed at a cost of Rs.53 million.
By the implementation of the project effective control over the
river Chenab U/S of Marala Barrage has become possible and
the gigantic canals of UCC and M.R.Link have been saved
against their scour / siltation.
¾ Basal Dam was constructed in District Attock at a cost of Rs.30

million. This will irrigate about 400 acres of virgin land besides
meeting drinking water needs.
¾ Mial Dam in District Chakwal (Rs.66 million) and Lehri Dam (Rs
127 million) in District Jhelum have been approved and
launched for implementation during the year 2003-04. These
Dams will irrigate about 3155 acres of virgin land besides
meeting with the drinking water needs of the people living in the
area. These dams shall be completed by June 2005.
¾ A project “Fan Management of Mithawan Hill Torrent in DG

Khan District” costing Rs.300 million was launched with the
assistance of Government of Japan. GO Japan had provided
machinery costing Rs.162 million whereas civil works costing Rs
202 million have been started during the year 2002-03. With the
implementation of this project, 35,000 acres Barani area of
District DG Khan will be benefited.
Livestock
The achievements in the livestock sector in FY 03-04 were:
• Access to credit lines for development of livestock and dairy

industry
¾ Bank of Punjab, Zarai Taraqiati Bank of Pakistan and Khushali Bank

have started loaning facilities to the livestock farmers in the Province of
Punjab.
44
¾ The farming community is being benefited of the loaning facility at 6-

8% Mark Up. The loans are advanced on personal guarantee,
mortgage of the Agriculture land and the Urban properties for purchase
of milk animals, milk transportation facilities.
¾ Bank of Punjab has also implemented a scheme to finance the Village

Veterinary Workers trained by the L&DD Department for procurement
of Artificial Insemination kits and Bicycle on personal guarantees. The
maximum limit of loan is Rs.45,000/-. L&DD Department has trained
1000 Village Veterinary Workers up till now.
• Replication of Idara-e-Kissan model for development of livestock and

dairy industry.
¾ Idara-e-Kissan model has been replicated with an amount of Rs.37.00

million in District Muzaffargarh (Rs.10.00 million funds from Govt. of
the Punjab and Rs.17.00 million funds from Idara-e-Kissan)
¾ Physical activities undertaken:
N0 of villages registered 27
Registered members 580
Cooling tanks(1800 lit) 6
Vaccination of animals 4,500
¾ The Idara-e-Kisan Project would be extended to 5 additional districts in

the Punjab in the next financial year. The Project would be located
close to existing marketing centers.
• Breed improvement
¾ Production of 1.42 million doses of semen

¾ 1.11 million buffalos and cattle inseminated
¾ 5 lac livestock farmers benefited
¾ 540 breeding bulls issued to livestock breeders
• Animal Health
¾ Veterinary treatment provided to 5.46 million animals

¾ 31.44 million animals vaccinated against contingent diseases.
¾ 25 lac livestock holders benefited.
45
Enabling environment for entrepreneurs

(Industrial Development)
In my Economic vision I have talked at length regarding our emphasis on

industrial development and releasing the energies of the private sector for
playing a leading role. Our initiatives in this sector are as under:
¾ No Government sanction is required for setting up any Industry, in

terms of field of activity, location and size, except for the following:
- Arms & Ammunitions

- High Explosives
- Radioactive Substances
- Security Printing, Currency & Mint
- Alcoholic beverages & liquors
¾ Boiler and Electrical inspections have been outsourced.
¾ A WTO Cell has been established in the Industries, Commerce &

Investment Department.
¾ A private sector led Punjab Industrial Estates Development &

Management Company (PIEDMC) has been established to set up
modern Industrial Estates and to maintain the existing large Industrial
Estates. The Government has allocated Rs.1.35 billion. PIEDMC has
started work on the establishment of a large Industrial Estate at Sunder
near Lahore and also started renovation work at the Industrial Estates
at Kot Lakhpat and Multan.
¾ Private Sector led Industrial Management Associations with majority

members from the private sector, have been constituted in all the
Industrial Estates in the Province to operate and maintain them with
minimum interference by Government agencies.
The concept of Industrial Estate Development would be backed up by a

composite development plan through establishment of workers schools,
labour colonies, hospitals and technical training institutions around an
Industrial Estate.
¾ The Punjab Small Industries Corporation (PSIC) has sanctioned loans

for 1332 Small Industrial Enterprises, amounting to Rs.1303.24 million.
¾ The PSIC has renovated and provided missing facilities in 5 of its

existing Small Industrial Estates.
¾ TEVTA has re-organized and upgraded its technical & vocational

institutes and enrolled 93,000 additional young persons for skills
training. The annual training capacity has also been increased from
46
72,000 to 89,000. Eight new Technologies and sixty new trades /

courses have been introduced along with latest training equipment at
TEVTA Institutes.
¾ To facilitate Investment, foreign investors are permitted to hold 100%

equity of projects in the manufacturing sector. 25% of available plots
in all Industrial Estates have also been reserved for Foreign Investors
including overseas Pakistanis.
My government announced the Punjab Industrial policy 2003 which is

based on the doctrine of non-intrusion and least interference and on minimizing
the regulatory role of the Labour & Human Resources Department. This policy
has brought about far reaching changes by shifting the focus away from coercion
and intimidation to self assessment and self accountability.
• A system of Self Declarations in social security has been introduced.
• In the first nine months period (July 2003 to March 2004), Social Security
receipts were Rs.837,199,904/-, which was more than the budgetary
target.
• Education Cess, which was a cause of nuisance to industry, was

abolished and stipends and expenditures charged to the education cess
were taken over by the government.
• The industrial policy also provides for the construction of 20 new 100
bedded hospitals in phases for the labour community.
• The existing capacity of the hospital beds is being increased to 3500 from
1400 in a phased manner.
• Punjab Social Security Health Management Company is in the final stages

of its creation, which shall provide medical coverage in a very effective
manner. This company would be in operation in July 2004.
47
Housing and Construction Industry
We are targeting Housing and Construction Industry as an engine of our

economic recovery. We realize the potential of this sector and made a modest
beginning last year by reducing the stamp duty and registration fee for legal
mortgages on housing loans to 0.5% of the transaction. In the coming financial
year, the Housing and Construction Industry would be provided adequate tax and
non-tax incentives to promote this sector. In addition, land acquisition laws, rent
control laws, building by laws and the law relating to property tax would be
reviewed to remove impediments in the path of the housing and construction
industry. The by laws relating to high-rise buildings would be specially re-visited
to improve land use in the commercial centres of the highly urbanised mega
cities.
To complement the activities of the private sector, the Government of the

Punjab has launched the Punjab Government Servants Housing Foundation
which shall provide a house to each retiring government servant in the Punjab
from BS-1 to BS-22. Initially 5,000 to 6,000 houses would be constructed
annually. However, this number would ultimately increase to almost 30,000
houses per annum. A beginning was made to launch this scheme by allocating
Rs.373 million in the outgoing financial year to the Foundation. In future years,
the annual allocation is likely to range between Rs.300 to Rs.400 million. The
net effect of this programme would be to demonstrate government’s commitment
to the housing sector as well as undertaking a welfare measure for its
employees.
Developing Communications Network
I had emphasised the importance of communications infrastructure in

developing our productive sectors. I had observed that access to
communications had a positive effect on the economy of a local area by
increasing mobility, reducing transportation time and cost, enhancing access to
goods and services and stimulating commercial and other income generating
activities through better access to markets. I had committed an allocation of over
Rs.10 billion in the road building sector in the medium term, as well as promoting
48
projects in BOT mode. Let me share with you the highlights of our achievements
in the outgoing financial year: -
• An initial allocation of Rs.1,018 million in the roads and bridges sector was
made in the current financial year which catered for widening /
improvement of 330 kms of roads in the province.
• An additional allocation of Rs.4,052 million was made in January 2004

enabling us to undertake widening / improvement of 850 kms of road
length.
• Development, rehabilitation and upgrading of urban road network was

initiated in the mega cities of the Punjab and would continue to remain in
focus in the next three years.
• The Lahore Faisalabad road project has been let out to the private sector
in the BOT mode and construction work on the project has already
commenced.
It is a part of my vision that every village in the province is provided

access to a metalled road. For this purpose I have initiated the Accelerated
Programme for Communication Infrastructure Development in the Punjab. We
hope to invest Rs.7 billion in this programme in the next three years. A beginning
has already been made through a proposed investment of Rs.2 billion in
FY 04-05
Reform of Planning and Implementation Processes
Our achievements of financial year 2003-04 may not have been possible
without initiating the process of reform in our planning and implementation
processes. The Planning and Development Department was taken out of its
project focused mode and steps were taken to make it into a dynamic organ of
economic and social planning. The public sector development investment and
sectoral policies now follow a clearly defined agenda. Let me give you a preview
of the change management which has taken place in the Planning and
Development Department. The objectives and priorities set forth by the Planning
49
and Development Department are now completely in line with the economic and
social vision of my government.
PUBLIC SECTOR DEVELOPMENT INVESTMENT
The Public Sector Development investment will be tailored to achieve the

following objectives:
• Accelerating economic growth.

• Reduction in poverty.
• Balanced regional, gender and minority development.
• Consolidation of existing physical and social infrastructure.
• Improvements in public service delivery in education, health and
water and sanitation sectors and enhanced coverages.
• New infrastructural development through public-private
partnership.
SECTORAL POLICIES
Social Sectors
• Commitment to enhanced coverage in the social sectors, with a

view to achieve all targets fixed for the Millennium Development
Goals, with the recognition that investment made by the Local
Governments alone will not suffice to meet the goals.
• Launching of the Accelerated Programme for Social

Development for this purpose.
• All administrative departments concerned would be responsible

for preparing medium term plans in the social sectors which will
identify targets, gaps, priorities and service standards. The
departments would also be responsible for developing policy
guidelines to be followed by Local Governments and to develop
monitoring/ regulatory mechanism to ensure adherence to
policy, quality, equity and sustainability in the delivery of service.
Urban Services
• Development of institutional arrangements to address policy and

strategic planning in big and intermediate cities. An over-
arching Provincial Urban Policy will be put in place along with
the Institutional Capacity to oversee its implementation.
50
• Interventions will be designed to unleash the full economic

potential of the urban areas. The key element of this strategy
would be: -
¾ Developing and implementing a collaborative work plan for a

more focussed approach to address the growth potential of
each region based on the full spectrum of potential public
and private sector capabilities.
¾ Cultivating and pursuing successful public and private sector

partnerships to help realise this latent potential, as
government financing alone will be insufficient to meet the
investment requirements.
Economic Infrastructure
• The water sector would see the launching of a major
programme for the modernization and rehabilitation of barrages
and canals. Institutional reform process in the sector would also
be addressed along with a programme in improve water-
efficiencies in the province.
• The vision of providing every village in the province access to a

metalled road will move a step closer with the launching of the
Accelerated Programme for Infrastructure Development.
Implementation and Monitoring
The planning effort needs to be backed up by an effective implementation

and monitoring system. We have created a project monitoring unit in the
Planning and Development Department which shall monitor the progress of
development projects by employing the concept of “earned value”. Under this
reformed monitoring system the physical progress and the financial progress
achieved during the execution of development schemes shall be monitored
simultaneously. This would enable top managers to monitor projects closely and
rectify deficiencies during project execution. This would ensure timely financial
flows to projects, constantly review the project conception and design and in the
process generate internal pressures on Planning, Finance and the line
departments.
51
Fiscal and Financial Management
Our efforts to generate economic growth, to make accelerated social

sector investment and to combat the menace of poverty cannot be achieved
without a reformed fiscal and financial management system. Creation of fiscal
space is absolutely essential for sustainable pro-poor investments and
accelerated economic activity. As you know the Province of the Punjab was
caught up in a vicious cycle of financing and service delivery. The fiscal squeeze
due to low revenues, high debt service and establishment costs, pensions and
subsidies meant low level of spending on public services. This translated into an
inadequate provision of services to the public. That led to a low potential tax
base, creating a worsening financial squeeze. This did not augur well for my
programme of reducing social deficits resulting in inadequate investments in
health, education, water supply, sanitation and access to justice. It would have
also affected my programme of reducing the infrastructure deficits resulting from
inadequate outlays for maintenance of the irrigation system, buildings and roads
network.
VICIOUS CYCLE OF PROVINCIAL FINANCES

AND SERVICE DELIVERY
FISCAL SQUEEZE DUE TO LOW REVENUES,

HIGH DEBT SERVICE AND ESTABLISHMENT COSTS,
PENSIONS AND SUBSIDIES
LOW POTENTIAL LOW LEVEL OF

TAX BASE SPENDING ON
PUBLIC SERVICES
INADEQUATE PROVISION OF
SERVICES TO THE PUBLIC
52
We adopted a three pronged strategy to break the vicious cycle of

provincial finances and services delivery in the Punjab. Firstly, problems in
public expenditure management had to be addressed. Secondly, provincial
revenues had to be strengthened and thirdly, improved planning, documentation
and accountability of public expenditure had to be ensured.
The process of rationalization of provincial expenditures began by

adopting a debt management strategy to restructure and reduce provincial debt.
High interest commodity loans were swapped with low interest loans. In the
current financial year we retired over Rs.12 billion of our high cost loans thus
creating a fiscal space of over Rs.1 billion for the next financial year. This policy
would continue.
We also undertook the phasing out of subsidies which did not explicitly
target the poor. As a result we provided a targeted subsidy of over Rs. 500
billion to the poor and in the process created a fiscal space of almost Rs. 1.2
billion. Simultaneously we adopted a policy of intra-budgetary shifts, thus moving
expenditures towards the social sectors at the cost of non-productive sectors.
We also increased the outlays for O&M expenditures in buildings, roads and
irrigation thus redeeming my observation that current expenditures needed to
complement the development activity. In addition we have targeted receipts from
privatization as a revenue source to finance our social and economic sectors.
Much more needs to be done. We still have to tackle the high cost of our
pension and GP Fund liabilities. These contingent liabilities require to be phased
out of the budget by the creation of separate self financing funds. This is our
target for the future.
Our fiscal reform measures envisaged a broadening of the tax base and
restructuring of provincial taxes and duties. During the financial year we
completed the restructuring and simplification of property tax. The base of
professional tax was broadened. More importantly the desire to re-impose low
yielding taxes was resisted. Above all, we would be rationalizing stamp duties,
the details of which would be presented in the budget 2004-05. On the negative
53
side we are still struggling for improving the receipts from the agriculture income
tax.
Overall our revenue collection from provincial taxes is expected to improve

from the budgeted Rs.14 billion to Rs.18 billion, a record increase of 31%. This
entailed a lot of effort to create fiscal efficiency, and plug revenue leakages. The
non-tax receipts are likely to improve from Rs.10.49 billion to almost Rs.14
billion, again a record increase of 45% over the budget estimates. I must
commend the efforts of the revenue collecting departments for creating the
necessary fiscal space for the Provincial Government to undertake its agenda of
social and economic reforms. Much more work would be required in the coming
years to sustain this level of commitment in strengthening provincial revenues.
The accountability of public expenditures was supported by improved

documentation. The first steps were taken through the publication of a medium
term budgetary framework and of a debt management strategy. In the
forthcoming budget a much more comprehensive medium term budgetary
framework would be published as a separate budget document to mark the
commitment of the Provincial Government to medium term planning as opposed
to year to year plans. The adoption of PIFRA and the New Accounting Model
(prescribed by the Auditor General of Pakistan), by the Punjab Government
would lend greater impetus to fiscal and financial accountability.
In the field of expenditure allocation, my commitment to education, health,

water supply and sanitation and other social sectors is reflected in the enhanced
allocations in the forth coming budget. The education sector would receive an
additional grant of Rs.8.3 billion in FY 04-05. The health sector would receive an
additional grant of Rs.3.5 billion in the next financial year. Access to justice
sector including security of the citizens would be supported by an additional grant
of Rs.2 billion. The water supply and sanitation sector would receive upwards of
Rs.3 billion.
In addition to the above a dedicated allocation of over Rs.9 billion would

be provided in the shape of equity contributions, loans and grants to public sector
54
enterprises to finance projects like the Lahore ring road, the development of new
Murree, the development of entertainment facilities like Jallo Theme Park and
IMAX theatre. In addition special funds would be dedicated to the establishment
of Punjab Agriculture Marketing Company and for the activities of the Punjab
Industrial Estate Management Company. Above all, the newly created Punjab
Social Security Hospital Management Company would be funded through a grant
of Rs.470 million to finance health delivery for labour. God willing, the
establishment of a university of excellence in the Punjab Engineering Triangle
would be funded during the course of the next financial year.
I realize that we have embarked upon an ambitious programme of

economic and social recovery. While we are firm in our resolve to translate our
aspirations and plans into a reality, we look forward to all the support from civil
society and stakeholders in the fulfilment of our economic vision.
MAY GOD BLESS YOU ALL!
PAKISTAN PAINDABAD
55

Punjab Vision 2020

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PUNJAB’S VISION 2020

PRE BUDGET POLICY ADDRESS

CH. PERVAIZ ELAHI

June 15, 2004

BROAD-BASED LONG TERM STRATEGIES 4-7

MEDIUM TERM STRATEGIES 7 - 15

AGRICULTURAL SECTOR 8-9

LINKS WITH LAST YEAR’S POLICY STATEMENT 15 - 37

GOVERNANCE REFORMS 15 -22

Devolution and Local Governments 16 - 17

Civil Service Reforms 19 - 20

SOCIAL SECTOR INVESTMENTS 22 - 30

Health and Population Welfare 27 - 30

PUBLIC HEALTH (Water Supply and Sanitation) 30

DIRECT INTERVENTIONS FOR POVERTY ALLEVIATION 30 - 34

Micro-Credit through Punjab Rural

Access to Physical Assets 34

WOMEN DEVELOPMENT AND GENDER REFORMS 36 - 37

ECONOMIC GROWTH STRATEGY 37 - 49

LIVESTOCK AND DAIRY DEVELOPMENT 44 - 45

ENABLING ENVIRONMENT FOR ENTREPRENEURS 46 - 47

HOUSING AND CONSTRUCTION INDUSTRY 48

DEVELOPING COMMUNICATIONS NETWORK 48 - 49

REFORM OF PLANNING AND IMPLEMENTATION PROCESSES 49 - 51

PUBLIC SECTOR DEVELOPMENT INVESTMENT 50

IMPLEMENTATION AND MONITORING 51

FISCAL AND FINANCIAL MANAGEMENT 52 - 55

Ladies and Gentlemen of the Media!

I accord you my warmest welcome.

Last year I had introduced the concept of a medium term budgetary

Everywhere I go in the Punjab people are clamoring for development and

Punjab is truly blessed with a huge agriculture resource with a great

BROAD-BASED LONG TERM STRATEGIES

What strategies can the Punjab government adopt to move towards

The proposed Punjab development strategy revolves around the twin

administrative structures to co-ordinate the processes of production and

Punjab has many large industrial concentrations. Notable examples are

While federal institutions are majors players in providing physical

Finally the government needs to have a development funding strategy.

MEDIUM TERM STRATEGIES

It has been estimated that if the growing trend of poverty and

Our role in the government would be to provide an environment conducive to the

The economy of Punjab rests on four pillars:

We have to bring our agricultural sector into the 21st century. As an

• Promote private sector investment in

• Modernize Wholesale markets

 Reform market regulations

• Exploit competitive advantage of each district

THE MANUFACTURING SECTOR

Figure. 1 The close location of thousands of

This area has already created a critical mass of manufacturers. A

manufacturing, management and marketing capabilities is needed. This would

1. Create effective institutions for developing technological skills

This would require a major human resource development program

would seek collaboration of one of the great manufacturing nations

Similarly through TEVTA and collaboration of some industrialized

2. Provision of high quality Physical infrastructure:

This infrastructure would include the establishment of Export

3. Provision of High Quality common facilities:

This would require setting up of research and testing facilities,

4. Creating an image and marketing of the Punjab Engineering

The objective would be to attract domestic and foreign investment

investment promotion. The Punjab industries department will be

Reform market regulations

The Light Engineering cluster in the Lahore, Gujrat and

The Cotton and Ginning Cluster (Multan, RY khan)

Rationalization and reduction in taxes

Rationalization of stamp duty

Development of tourist resorts

Improving inter city and urban transport

Developing urban commercial centres