Four to six million workers lost jobs in Punjab province

Punjab's economy suffered loss of Rs500 billion to Rs 800 billion ($3to 5 billion) 

According to the budget documents of Punjab government, four to six million people have lost their jobs in Punjab. The province has suffered an economic loss to the tune of Rs 500 billion to Rs 800 billion ($3-5 billion) due to the COVID-19 pandemic outbreak and restrictions imposed to contain it.

The documents highlight that Covid-19 has caused a major setback to the national and provincial economies alike. All economic indicators of the country have fallen into the negative zone. The budget documents show that the fiscal deficit of the country will swell by nearly 2% and hover between 9.2% and 9.5% of the GDP. Estimates show that export growth rate dropped from 5.6% to minus 2.1% due to the pandemic. Remittances were expected to increase 3.4% but they dropped by 4.8% to 6.5%.

In initial response the Punjab government took emergency steps to provide financial assistance of Rs 25 billion to affected population. The efforts, however, are still ongoing and require further support in the fight against the disease and its destructive impacts on the economy and society pointed out the documents.

Apart from direct spending on relief and recovery, the government took other initiatives to help support the economy and the fiscal base of the province and provided relief in various provincial taxes of Rs 18 billion.

However, the budget documents have also exposed the inadequacy of the provincial healthcare system and failure of successive governments in this regard. It highlights that though the provincial government initiated its response to combat the pandemic at quite an early stage, the virus poses a big challenge for the government and policymakers in the lower middle income country, which spends less than 1% of the GDP on health. It points out that the pandemic crippled the healthcare system of even the developed countries within the first couple of weeks.

The documents highlights that there is a huge disparity in the rural and urban healthcare delivery systems.

The documents also pointed out that Punjab government would take measures to increase the revenues through broadening the tax base, implementation of strict austerity measures; efforts for recovery of receivables of Punjab government; and privatisation of companies and assets owned by the province.

The budget documents also highlight the measures taken by the Pun jab government to provide relief to different sectors of the economy and different sections of the population. The government has reduced stamp duty rate to 1% in urban areas to provide economic relief of around Rs 10 billion. Urban Immovable Property Tax (UIPT) has been waived to provide Rs3.1 billion relief. Electricity duty has been suspended to give relief of Rs 2.3 billion. Provincial sales tax on services has been suspended for over 20 sectors to grant Rs1.4 billion discount. The Punjab Infrastructure Development Cess has been suspended and professional tax waived to give relief of Rs1 billion and Rs 200 million to the citizens, respectively.

                                                                         Naila Chaudhary