Higher education is a rich cultural and scientific asset that prepares students for future challenges besides promoting economic, technological, and social change in society.
Despite the enormous significance of higher education in the country’s socioeconomic development, the majority of public sector universities in Khyber-Pakhtunkhwa (K-P) were currently facing a financial crisis, which adversely affected the process of learning and research studies, besides negatively impacting students’ enrolment in MS, MPhil, and PhD programmes in the province.
Out of the total 34 public sector universities, including 24 general and 10 specialised in engineering, technology, agriculture, medical, animal husbandry, and management sciences, seven public sector universities, including UET Peshawar, Gomal University DI Khan, Agriculture University Peshawar, University of Science and Technology Bannu, Shaheed Benazir Bhutto University Peshawar, and University of Shangla, were facing a significant financial crunch due to pension liabilities and depleting budget balances.
The K-P Universities 2021-24 Report has revealed that the initial balances of budgets of 34 public sector universities and HEI’s, which were Rs6,560 million in 2021-22, decreased to Rs5,316 million in 2022-23 and were further slashed to Rs4,740 million in 2023-24.
The decrease in the opening balance budgets of these universities has not only created serious financial challenges but has also encompassed financial fluctuations and economic stagnation for research studies, salaries, and pensions.
During the last three years, the provincial grant to public sector universities, which was Rs3,962 million in 2022-23, was slashed to Rs3,276.125 million during 2023-24, and only Rs1,231.897 million was recorded during 2021-22.
The financial crisis in most universities has been further deepened after non-payment of the promised annual provincial grants of Rs3,000 million, negatively impacting the universities’ abilities to maintain infrastructure, support academic programmes, research studies, and ensure quality in education disciplines.
However, the federal grants to K-P universities had witnessed substantial growth; Rs10.13 billion in 2021-22, Rs10.91 billion in 2022-23, and Rs10.95 billion in 2023-24. But 18 universities in K-P have faced a decrease in federal grants during 2022-23 and 2023-24.
Similarly, no provincial grant was received by University of Agriculture Peshawar in 2021-22 and 2023-24, University of Buner and UET Peshawar during the current fiscal year. Moreover, University of Engineering and Applied Sciences Swat, University of Chitral, Abdul Wali Khan University Mardan, Institute of Applied Sciences and Technology Haripur, and Gomal University DI Khan had received no provincial grants during 2021-22.
Despite the provision of Rs20 billion in grants to old universities, the situation was still dismal, and regular support from the HEC was imperative to stand the recently established universities on their own feet in K-P.
In the last three years, the annual receipts of these universities were Rs46 billion, while annual expenditures remained Rs41 billion. Despite reforms and interventions, K-P’s universities saw only modest revenue growth of Rs7 billion in 2021 and Rs2 billion in 2022, thus falling short of the mandatory progressive targets.
“The poor health of the majority of universities was exposed by the report needs the attention of all stakeholders,” said Professor Dr Muhammad Naeem, former Chairman Economics Department, University of Peshawar.
He said 20 out of 34 universities were likely to face budget deficits at the close of the current financial year while 27 universities allocated over 50% of their budgets to establishment expenditures, needing realignment of priorities on a war footing basis.
“The opening of new universities in far-flung areas for political purposes has negatively impacted research studies besides MS/MPhil and PhD programmes.”
“Closure of financially unstable universities was no solution to problems rather the government needs to divert financial resources to strengthen it,” he said. “The main duties of universities are to conduct research. However, the poor allocation is hampering research works at most new universities,” he said, adding in fiscal year 2023-24, the total expenditure of all 34 universities reached Rs41 billion against which only Rs1 billion was earmarked for research initiatives, which was like salt in flour.”
Published in The Express Tribune, October 8th, 2023.
IHC halts Rs35b tax on banks
The Islamabad High Court (IHC) on Wednesday suspended the government’s decision to impose a windfall income tax on commercial banks for the recovery of Rs35 billion, after lawyers questioned the powers of the interim setup and the constitutionality of the move.
The court’s decision came a day before the last date for the payment of an estimated Rs35 billion tax by those commercial banks that had manipulated the value of foreign currency to make extra profits.
The Federal Board of Revenue (FBR) was betting on the Rs35 billion in revenues to achieve its monthly target of nearly Rs711 billion. It is now left with the goal of collecting over Rs100 billion more today (Thursday) to meet the monthly target, although it may achieve the five-month tax collection target of Rs3.45 trillion.
design: Ibrahim Yahya
design: Ibrahim Yahya
“The submissions (by petitioners) demonstrate not only a prima facie case but also that the ingredients of balance of convenience and irreparable loss operate in favour of the petitioner. Resultantly, the operation of the impugned statutory regulatory order shall remain suspended till the next date of hearing,” reads the short order of the court.
Eight days ago, the FBR, through SRO 1588, had imposed a 40% windfall income tax on income from foreign exchange of banking companies for the preceding two years ended on December 31, 2021, and 2022.
Advocate Supreme Court, Salman Akram Raja, pleaded before the court on behalf of his banking clients.
While the government had anticipated banks to challenge the levy, the financial institutions were finding it difficult to hire lawyers to plead their case.
The government had issued the SRO under section 99D, which the Parliament had inserted into the law in June this year. While the FBR imposed taxes on the banks to get an additional Rs35 billion out of an estimated Rs90 billion windfall income, it conveniently ignored a windfall profit of approximately Rs1.5 trillion made by exporters. The Ministry of Finance has estimated that the exporters made a windfall gain of Rs1.5 trillion due to steep currency devaluation these past few years.
The banks’ lawyers argued that section 99D (through which the federal government could determine a tax rate between 0% and 40%) was tantamount to excessive delegation of power by Parliament and in breach of Article 77 of the Constitution.
The legal team also questioned the power of the caretaker government in imposing the tax, arguing that the function of the caretaker government was only to “attend to day-to-day affairs and (it) cannot extend its authority to a fresh taxation measure.”
The legal team also argued that the SRO was also defective in that the determination of the preconditions under section 99D, namely, the economic factors that led to the windfall income as well as the quantum of the windfall income, are conspicuous by their absence in the impugned SRO.
The team further argued that by reading the SRO, there was only an underlying (but invalidated) assumption that external economic factors have actually operated and led to a windfall income but without these being spelt out in the notification, which would be expected given the letter and spirit of section 99D.
The petitioners also claimed that the charge of additional tax conflicted with entry number 47 in the Legislative List for imposing an additional tax which was not warranted.
The law requires that the notification of the windfall tax has to be placed before the National Assembly within three months –a clause that the banks have now invoked as there is no assembly in Pakistan and the next elections are scheduled for February 8th.
The lawyer argued before the court that the government assumes that the next assembly will validate its action but it is quite possible that the National Assembly does not agree to bless the notification.
If the next assembly rejects the additional tax, banks would be at a disadvantageous position, according to the petitioners.
The court did not accept the arguments of the FBR legal counsel who submitted that the legislation has to remain operative until it is declared ultra vires. The court accepted the banks’ argument that the interim relief is sought in respect of the SRO, which is an executive act and not legislation and, therefore, prima facie not covered by the judgments on the point referred to by the counsel for the FBR.
Published in The Express Tribune, November 30th, 2023.
Growers sound alarm on fertiliser crisis
Growers in Sindh have appealed to the federal and provincial governments, as well as Chief of Army Staff (COAS) General Asim Munir, to take notice and prompt action to curb hoarding, smuggling, counterfeiting, and the black market of Urea and diammonium phosphate (DAP) fertilisers in Sindh immediately; otherwise, food insecurity could ensue.
“After demanding action from the federal and provincial governments on multiple occasions, I had to write a letter [available with The Express Tribune] to the COAS to address the ineptitude of all three fertiliser companies: Fauji Fertiliser Company Limited, Engro Fertilisers Limited, and Fatima Fertiliser Company Limited. Additionally, three Sindh government departments, including Sindh Agriculture Extension, Anti-Corruption Establishment (ACE), and Revenue, are being implicated in hoarding, smuggling, counterfeiting, and the black market of fertilisers due to nepotism, favouritism, and corruption. This is agonising farmers and driving up input costs of agricultural produce,” said Ali Palh, Advocate and President of the Small Growers’ Organisation Sindh Agriculture Research Council (SARC), speaking to The Express Tribune.
He highlighted that the government’s substantial subsidies to fertiliser companies have been in vain, as poor growers are not benefiting from them, leading to an acute shortage of fertilisers in the market. “We have laws, including the Sindh Fertiliser (Control) Act 1994 and Sindh Fertiliser (Control) Rules 1999; however, they are not being implemented to benefit peasants at all,” he emphasised.
Frustrated with the caretaker government, Jawaid Junejo, Chairman of the Farmer Organisations Council Sindh, expressed concern that large farmers are being compelled to purchase fertiliser sacks at almost double rates, while small growers are unable to obtain them, even at higher rates in the market. “We are running a social media trend; those who provide fertilisers at government rates to farmers will garner votes from the people in the upcoming general elections. This is the wheat sowing season, and we are being deprived of fertilisers,” he lamented.
Sindh Chamber of Agriculture (SCA), Senior Vice President, Nabi Bux Sathio highlighted that instead of a controlled Urea price at Rs3,680 per 50kg bag, it is being sold for Rs5,000-5,500 per 50kg in the market. He pointed out that a 50kg sack of DAP, which was sold at Rs9,000 until October 30, is now being sold at Rs15,000 per 50kg bag due to wheat sowing and other Rabi season crops.
“A total of 6.5 million tonnes of Urea are being produced in the country, meeting a local demand of 6.2 million tonnes. We should have a surplus, but no action is being taken. Growers need Urea and DAP fertilisers for better yield, rapid growth of standing crops. I urged the Sindh Chief Minister during a meeting today (Wednesday) in Hyderabad to make the fertiliser portal, set up by the federal government under the Ministry of Industries and Production, public. This way, every farmer can obtain updated information about actual bags of fertilisers sent to authorised dealers in every district. I also proposed forming an agriculture advisory committee to monitor agriculture issues and fix problems through monthly meetings,” he concluded.
Published in The Express Tribune, November 30th, 2023.
Saudi Arabia wins bid for 2030 world fair
The Saudi Arabian capital of Riyadh won the right to host the Expo 2030 world fair, vote results showed on Tuesday, in another diplomatic victory for a Gulf country after last year’s soccer World Cup in Qatar.
South Korea’s port city of Busan and Rome in Italy were also in the running to host the five-yearly event that attracts millions of visitors and billions of dollars in investment.
Riyadh won 119 votes, Busan 29 and Rome 17, results from 182 members of the Paris-based Bureau International des Expositions (BIE) showed. Saudi Arabia needed two-thirds of the votes to win from the first round.
The Italian contestants were scathing in their disappointment.
“This huge result for Saudi was unexpected in those proportions,” Giampiero Massolo, head of the Italian Expo bid, told reporters. “It is no longer about the merits, but about transactions. Yesterday it was a soccer championship, tomorrow it will be the Olympics,” he added.
However, South Korean President Yoon Suk Yeol congratulated Saudi Arabia for winning the bid, calling the Gulf state “a key partner,” and adding that his nation would share the resources and experience gained to help Riyadh hold a successful event.
Riyadh had enlisted soccer star Cristiano Ronaldo, who plays for the Al-Nassr Saudi club, to convince members in a video projected before the vote. Riyadh aims to host the event between October 2030 and March 2031.
The win is the icing on the cake for de-facto ruler Crown Prince Mohammed bin Salman’s ambitious Vision 2030 programme, which aims to wean the country off its oil dependency.
Published in The Express Tribune, November 30th, 2023.
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