Home »Editorials » Federal tax revenue: Karachi’s contribution

  • News Desk
  • Jul 22nd, 2018
  • Comments Off on Federal tax revenue: Karachi’s contribution
That Karachi is the largest contributor to the federal tax revenue receipts is no news for the city of the Quaid has been the big hand that feeds the exchequer of the country since its inception. Moreover, the next two cities are miles from where Karachi is placed. This argument does warrant a healthy debate over why Karachi continues to be meted out a stepmotherly treatment despite the fact that this city of teeming millions makes humongous contributions to the country's economy. According to a Business Recorder report, the country generates 86 percent of its total federal tax revenue from its three major cities as Karachi contributes 55 percent, Islamabad 16 percent, and Lahore 15 percent. This has been gleaned from State of Pakistan Cities (SPC), a report launched by the Ministry of climate Change with the technical assistance of the United Nations Human Settlements Programme (UN Habitat) here on Thursday. The report has presented the current state of development in the 10 largest cities of Pakistan and highlighted the state of economy, social service delivery, planning and development, housing, environment and heritage in the cities of Pakistan. The report is said to have covered the underlying socio-economic drivers contributing to the local development needs of Pakistan.

According to census 2017, 75 million people live in urban areas of Pakistan and 54 percent of the total urban population inhabits 10 cities of the country. The report has ascertained that larger cities have seen enormous urban sprawl due to increase in population and change in land use in downtown as well as in their peripheries that are becoming extended part of cities. The situation therefore underscores the need for recalling the fact that in 1947, 82 percent of Punjab was rural. Seventy years later, however, there is hardly any difference between rural and urban populations in the largest province of the country.

The report also points out that the cities vary in terms of their size, economy, employment and tax revenues. Services and industry are the major employment sectors in Pakistani cities; the share of the service economy as a ratio is larger in cities than their share of services in the national economy. The country generates 95 percent of its total federal tax revenue from its 10 major cities. The average urban per capita income among the 10 cities varies between Rs 37,000 and Rs 70,000. Poverty in urban areas is a major and visible phenomenon. Six out of the top 10 major cities have double-digit poverty figures: Quetta, (with 46 percent), has the highest poverty rate while Islamabad, (3 percent) has the lowest poverty rate. Access to clean water continues to be a major problem in cities. Only 65.2 percent of households in country's 10 major cities have access to piped water connections. Cities largely lack sewage treatment and solid waste management facilities. The near absence of these facilities therefore leads to severe environmental pollution and contamination of surface and ground water bodies. Increasing urbanization has created pressing demands for housing in cities. The absence of any formal provision for the lower-income urban population and the people migrating from rural areas to urban areas has resulted in the creation of large informal settlements, lacking access to adequate level of services. The report also features data gap in the urban sector in Pakistan as one of the key limitations for sustainable development. The report emphasizes that Pakistani cities need to plan and manage their development in a better way to meet the needs and demands of their citizens and indeed of the country. To prosper, cities need to be more responsive towards the environment and adopt technologies and economies that are less wasteful and destructive. Thus, taking a more realistic approach to development that meets the demands of the present without compromising the ability of future generations to meet their own needs. This part of the report does present a sardonic comment on our approach to urban planning. Islamabad, the only fully planned town of the country, for example, is now dotted with a very large number of katchi abadis. These localities constitute new challenges to the capacity of Capital Development Authority (CDA).

Last but not least, Karachi continues to be ignored by both federal and provincial governments mainly because of the fact that the party or parties that traditionally dominate urban Sindh have never ruled the country or Sindh. The 2018 general elections, however, promise Karachiites a change in the Centre's Punjab-centric outlook for the benefit of this city which is widely known as 'mini Pakistan'. Coming as it does on the eve of general elections, this report can become a reference point for all those running for national and provincial assembly seats in Karachi.

Copyright Business Recorder, 2018


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