Public Exchequer Research Articles

Wheat Self-sufficiency in Different Policy Scenarios and Their Likely Impacts on Producers, Consumers, and the Public Exchequer

Every government faces a challenge to select an optimum policy to provide food supplies to the consumers at a reasonable price and maintain a reasonable nutritional standard. The alternative policy options available are an uninterrupted market, imports, input subsidies, price support, combined policy developed by the combination of input subsidy and price support, and investment on research and infrastructure development. This paper analyses the impact of these options on consumers’ and producers’ welfare, tax revenue, and foreign exchange requirement. The import and input subsidy give net return to the society while price support generates net loss. The triple combined policy option generates the highest net return to the society when each import and input subsidy component is combined with price support in the ratio of 40 and 20 percent, respectively. The best policies to provide higher wheat supplies at lower prices and to improve the welfare of consumers and producers were investment on agricultural research and development of irrigation infrastructure in the long run, but for the short run, the first and the second best option were respectively the combined and the input subsidy policy.

Framework of affordable cooperative housing through an innovative waqf-based source of finance in Karachi

PurposeThe purpose of this research is to introduce an innovative framework called the waqf cooperative housing framework (WCHF), with an objective to create a synergistic equilibrium between waqf and cooperative housing schemes. To tackle problems related to the dearth of financing, this research postulates an innovative waqf-based source of finance that involves generating revenue from common areas (waqf area) within the vicinity of the condominium.Design/methodology/approachPrimary data were collected through interviews and the data were analysed using the NVIVO software. The interviewees comprised managers from property development sectors, public sector officials, university lecturers in Islamic finance, CEOs, top management officials from Islamic financial institutions, community leaders and shariah scholars.FindingsA framework was proposed based on the result of the interviews. It was found that innovative models such as WCHF can resolve the issue of affordable housing in Karachi such as decreasing the financial burden on the public exchequer, bringing positive change to the lives of the poor, fulfilling the property developer’s corporate social responsibility, fulfilling the religious duty of the general public and condominium owners towards their fellow beings as well as creating new employment opportunities for people who are working in the financial sector (waqf management companies/trustees) and the construction sector.Research limitations/implicationsEven though this study has introduced an innovative and practical solution to the financing of affordable housing, it also encountered some limitations. First, it is conducted in Karachi city involving six group of respondents; thus, the findings cannot be generalised with other contexts. Similar research needs to be conducted in different contexts.Originality/valueTo date, this is among the first studies, to the best of the authors’ knowledge, to investigate cooperative affordable housing with the help of innovative Islamic finance tools in the context of Pakistan. Furthermore, insufficient attention has been given to the enabling and hindering factors behind the acceptance of a framework that seeks to initiate a cooperative scheme based on an innovative waqf financing tool that generates revenue from common areas around a condominium.

Paddy farmers in Kerala are willing to pay more for a modified crop insurance product

We study paddy farmers in Kerala and analyse the factors affecting their willingness to pay for crop insurance and for a hypothetical crop insurance product. The farmers are willing to pay higher premium rates if claims are settled based on the procurement price, instead of cultivation cost, and promptly; and individual losses are accounted for. A farmer's willingness to pay more is influenced positively by their landholding size and negatively by age. Infrastructural support, and efficient implementation, will help to resolve the design--reality gaps in insurance schemes. Designing popular schemes will reduce the subsidy burden on the public exchequer.

International Economic Law and the COVID-19 sanitary crisis: an introduction

The sanitary crisis has already had a substantial influence on the global economy, with restrictions on sanitary material exports, interruption of international transportation, increased screening of foreign investment, and challenges to intellectual property rights. It has compelled states to reconsider their core interests and national security, for example, in terms of maintaining pharmaceutical and vaccine manufacturing capacity. In addition, the lockdowns adopted in many countries have raised questions about their conformity with the existing free trade and investment treaties, and about the rationale of exceptions and derogations in these treaties. The economic consequences of the crisis have resulted in huge stimulus packages by national governments, putting a strain on the public exchequer and increasing debt. Financial experts also anticipate that the public debt to GDP ratio of most developed as well as emerging nations would further skyrocket and therefore the IMF, development banks, and other international financial institutions have been mobilized to meet the current and forthcoming financial needs of the most affected economies. Consequently, these diverse topics need a legal discussion, with an emphasis on the States' unique reactions and practices in their economic interactions, as well as the possibility of a post-COVID-19 world economic order.

Strategies to promote collaborative governance regime in Indian rural road maintenance

PurposeEffective maintenance of rural roads is an essential aspect of public infrastructure delivery. However, governments failed to upkeep the built infrastructure. Accordingly, this study addresses this pressing issue by identifying attributes, skills and resources for asset maintenance. To do this, collaborative governance, a recent plausible alternative in the public policy literature, is used.Design/methodology/approachThe literature review proffered 29 strategies for operationalising collaborative governance principles. A questionnaire survey with the public sector representatives comprising top-level, mid-level and lower-level engineers was used to test the applicability of these strategies in rural infrastructure maintenance of India. The rated responses concerning strategies were subjected to exploratory factor analysis to determine the underlying structure for reducing the dimensions to make them practically operational.FindingsThe exploratory factor analysis showed that six dimensions play an essential role in initiating and promoting collaboration. This parsimonious framework suggests building a common collaborative framework, communicating vision and fostering communities, leadership, increasing the industry's capacity, transparency of power and responsibilities, and technical and financial resources. Thus, governments’ initiatives to build collaboration is most prominent in initiating and sustaining a successful collaboration.Practical implicationsThe practical strategies reinforced through this study can formalise self-initiated regimes or independently convened regimes to a federally directed regime well within the scope of the national programmes. Thus, findings primarily have considerable implications to emerging countries where reducing the unit costs to save the public exchequer from wastage and preventing assets from becoming dilapidate are essential.Originality/valuePublic sector practitioners often lack the essential skills and innovative thinking and thus offered new knowledge would transform the traditional practices in infrastructure maintenance. Theoretically, the present research advances the understanding of structures and processes for collaborative governance theory to non-contractual infrastructure asset management literature.

Student Loans Financing in Tanza:

This study examined the mechanisms employed to finance student loans in Tanzania and who benefits and how. The findings show that student loans are financed by the public exchequer. The number of students fromhigh-income families accessing these loans is disproportionate to their representation in Higher Education Institutions, while the share for middle and low-income students reflects their representation. There is also animbalance between male and female beneficiaries across programmes, notably in the Science, Technology, Engineering, and Math (STEM) disciplines. It is concluded that such disparities are the result of the fact thatthe student loan scheme seeks to satisfy a number of government policy objectives in relation to higher education beyond access and equity, and that means testing is not rigorously conducted.
 Key words: Higher Education, higher education policy, financing higher education, higher education student loans, public subsidisation of higher education

Performance Analysis of Nonfinancial State-Owned Enterprises in Bangladesh

This paper aims to analyze the performance of non-financial SOEs and seeks possible remedial for the problems. State-owned enterprises play a vital role in Bangladesh. After the liberation war in 1971, the Bangladesh government had taken extensive measurements to nationalize some enterprises but due to lack to profitability, accountability, poor management, corruption caused these enterprises to fail in providing enough support to our economy. Bangladesh government has initiated the “Privatization of Public Enterprises” in a massive scale but the performance of these SOEs have not been improved. There are 49 non-financial SOEs in Bangladesh. These non-financial SOEs are classified under seven major sectors- industry, utility, transportation and communication, trade, agriculture, construction, and service. Among these seven major sectors, the service and utility sector have the highest contribution to the public exchequer. Most of the enterprises are facing loss (i.e. mainly industrial sector SOEs) and some others have vulnerable performance. The government is providing a huge subsidy, but the overall performance has not been improved. These SOEs need a reformation in cost minimization, management system, corruption prevention, and most importantly a proper effective policy formulation.

Lessons from Healthcare PPP’s in India

The NITI Aayog is working to develop and conduct pilot public–private partnership (PPP) projects to improve the delivery of healthcare services. The last two decades saw a rise in discussions and debates on the varied PPP models, as an opportunity to harness the private sector efficiencies and to supplement the public resources. However, the enthusiasm for experimenting with the PPP models fall short of the learnings from it. The limited but growing evidence based on PPPs in healthcare suggests that even the basic tenets of design and implementation of the PPP model have not been met, such as selection of qualified providers\contractors, designing contracts that align incentives, appropriately allocate risks and managing contracts using appropriate performance management tools. In general, the PPP models involve considerable risks and more so in healthcare given its unique characteristics, therefore if not designed and implemented with care, PPP’s in healthcare would prove to be wasteful and burdensome on the public exchequer.

Role of Banks in Money Laundering through Fake Bank Accounts and Writing off Loan in Pakistan: An Analytical Study

Purpose: Recent media reports of money laundering through fake bank accounts implicate the involvement of banks in money laundering through "managed bank accounts". Further the waivers of loan of apparently sound institutions also give rise to specific questions and reservations on the role of banks. This paper attempts to explore the answer to those fundamental questions.
 Design/Methodology/Approach: The research follows qualitative content analysis methods to critically analyze the role of banks in money laundering and loan waiver policies.
 Findings: The research finds that despite of heavy banking regulations and laws the banking accounts are being used for money laundering. Further, the research concludes that the act of waiving off loans allegedly has provided a channel to misuse the public earned money, resulting in gross loss to the public exchequer.
 Implications/Originality/Value: The research concludes that the role of bank in maintaining the fake/idle accounts and the loan waiver policy and its malafide usage in the banking sector resulted in financial frauds and money laundering in Pakistan

Coupling a ladder to the safety net: reinventing MGNREGA for asset creation

ABSTRACTIndia’s rural employment act (MGNREGA), the world’s largest public works programme, is designed to guarantee wage employment as a statutory right. It is viewed by many as a drain on the public exchequer, as wages are paid but durable assets are not created. Can this safety net be restructured to double up as a ladder of opportunity for the poor without altering its entitlement-based framework? This article shows that implementing four sets of interventions – policy for household livelihood assets, convergence approaches, pro-poor participatory planning, and strengthening accountability, can accelerate the creation of livelihood assets in the lands of the poor.

Public Financing in Higher Education Institutions: Issues and Challenges

This paper is an attempt to analyze the present pattern of funding higher education in Nepal and to discuss the desirability and feasibility of various alternative methods of funding the same. Before federal system, higher education (HE) in Nepal was a state funded but currently the paradigm has been shifted to the province government besides the funding of central university, which has not been well-defined. Higher education itself benefits not only society at large, but also individuals, and as it attracts relatively more privileged sections of the society, there is a rational for shifting the financial burden to the social domain rather to government sector alone.
 The main objective is to review the current policies, practices of financing in promoting access, quality, relevancy, equity and prosperity. On the basis of secondary sources of data this paper focused the reports published by University Grants Commission, Nepal (UGC). Some other relevant literature, reports, articles, books, policy documents were critically analyzed and reviewed to draw the findings and conclusion. Some statistical methods were used for interpretation.
 Resource constraints, equity, financing HE mostly from the general tax revenue may not be a desirable policy in the long run. Accordingly some of the alternative policy choices are discussed for financing HE from the public exchequer, student loans, student fees, and the role of the community investment. Among the available alternatives, it is argued that a discriminatory pricing mechanism and subsidy policies to community campuses of different layers of government would be relatively more efficient and equitable mechanism of financing as community campuses are providing the major access, equity, quality as well and reducing the financial burden of government with the cost recovery modality.
 It is argued that such institutions should be the priority of government for promoting equitable quality access to HE with nominal costs of users.

Indirect Tax Structure Prior to the Introduction of GST: Challenges and the Need for a Unified Tax Structure

An indirect tax is one which can be shifted from the original payer to the ultimate consumer of the commodity or service taxed. Indirect taxes (also called hidden taxes) are convenient to collect but lack equity attribute. They do not allow considerations for the personal circumstances of taxpayers as do direct taxes. The distribution of indirect tax burden is often, though not always, regressive and even the poorest of the poor are made to contribute to public exchequer. This paper examines the indirect tax structure of India prior to the introduction of Goods and Service Tax (GST) to enable an understanding and appreciation of the need for GST in India. It analyses the various indirect taxes such as import duties, excise levies, and sales taxes. It also shows how VAT, which is a multi-stage tax levied on all stages of production and distribution of a commodity, suffers from certain limitations. Despite the self-policing nature of VAT, opportunities do exist under it for evasion and fraud. The need to overcome various challenges and limitations of this indirect tax structure have led to the adoption of a unified tax regime, i.e. GST.

Does Diversification towards Oilseeds Production reduce the Import burden in Pakistan?

Agriculture, constitutes a large segment of Pakistan’s economy, is facing problems in the production of oilseed crops. The situation is getting bad to worse due to increase in population and demand of oilseeds has increased from 1.298 million tons to 3.069 million tons during the last thirty three years with the same local production capacity. During 2013-14, the local oilseed production comprised of 17.9 percent of the total consumption, while the remaining 82.1 percent of the demand was fulfilled through import. The Ordinary Least Square (OLS) technique is applied to examine the impact of different factors on the IHVC in Pakistan. The regression coefficient of import of oilseeds showed a negative and highly significant impact which indicated that huge import of oilseeds badly affects the public exchequer. The regression coefficient of number of tube wells, availability of credit and farm machinery (tractor) showed a positive and significant impact on IHVC. The regression coefficient of local production of oilseed crops showed a positive and significant impact, it showed that increasing the area for production of oilseeds enhanced the contribution of high value crops in GDP resultantly reduce the import burden.

Anti-Corruption Strategies of Public Procurement in Bhutan

Public Procurement can be defined as a business management functions that manage the entire process of acquisition of external resources using public fund. The procurement system must be easy to implement, with mechanisms of transparency and accountability in terms of resource spent and product purchased. Corruption in public procurement is a worldwide phenomenon which had lead to huge loss to public exchequer. Bhutan with increasing economic activities both at the national and international level with its GNH as a conscience for overall development that place peoples voice and their well being, procurement systems is to be guided by anti-corruption strategy to achieve national goal.This paper describes the Procurement measure in Bhutan, through this paper you will let know about some of the best practice of public procurement, corruption and its occurrence in Bhutan’s contest, a brief description of impact of corruption practice. The papers also describe about the procurement practice in Bhutan, and some of the case studies that will help in development of anti corruption strategies in procurement.

Value, Kinetic & Safety Fund for Corporate: Governance of Stock Exchanges

The 2008 economic crisis has taken a big toll and invariably no one is spared whether in business or not. Entrepreneurs, Legislators, Executives, Regulators & Experts are busy in finding out the reasons of such catastrophic economic failure ranging from greed, market incentives, liquidity crunch, failed supervision, imaginary & unrealistic mortgage contracts, over estimation, over expansion, over valuation, over expenditure, sentiments and what not! There is a consensus that it is man-made!! A number of commentators have suggested that if the liquidity crisis continues, there could be an extended recession or worse. The continuing development of the crisis prompted fears of a global economic collapse. The financial crisis is likely to yield the biggest banking shakeout since the savings-and-loan meltdown. Investment bank UBS stated on October 6 that 2008 would see a clear global recession, with recovery unlikely for at least two years. The failed one has a common character; they were widely held corporates, the listed companies. The author argues in his research that stock exchanges have failed to oversee their participating companies. The stock exchanges can introspect to evaluate if they could have smelled failure in advance; and if not then it is they who should be blamed on trusting them the stocks were valued and over valued in the market. Stock exchanges can create safety fund in future to save similar failures of those who at one time are transacting trade of stocks million times in a day. If a small fraction is levied and kept reserved in special fund, this can bail out the failed one. Diagnoses of such crisis and remedies are unending process. This is not the first and last crisis. The new economic crisis will occur at uncertain time due to some new pathogens. This research aims to defend pathological governance of stock exchanges. The researcher propose perpetual fund to be created and manage by stock exchanges of the value (levy based on price), by the value (Trader), for the value (To use in contingency). The paper discuss and propose permanent fund to bail out companies in time of distress without burden on public exchequer.

The Effect of Immigration on Public Finances

The impact of immigration on the public finances is an important influence on public opinion. This study aims to provide a thorough conceptual survey, pointing out the complexities of a full understanding and the relevance of indirect effects and covering both static perspectives and longer run dynamic issues. It considers simple accounting approaches which are relatively neglectful of behavioural responses but also tries to bring out the complexities in the nature of the relationship between immigration and the public exchequer that come with more sophisticated modelling of its economic effects.

Non-structural flood risk mitigation under developing country conditions: an analysis on the determinants of willingness to pay for flood insurance in rural Pakistan

The present study aims at unraveling the acceptability and potential of flood insurance as a viable mechanism to cope the financial risk associated with flood events in rural Pakistan. Moreover, the factors influencing rural households’ willingness to pay for flood insurance are also analyzed. Currently, the country faces an increasing rate of flooding due to climate change phenomenon resulting in abnormal monsoonal cycles and the melting of Himalayan glaciers in the region. The current flood management strategy of the country mainly involves ex-post relief and rehabilitation programs along with financial transfers to the flood victims from public funds without the involvement of private insurance companies. This puts enormous pressure on the public exchequer, leading to budgetary adjustments and tax escalation. Under such a scenario, flood insurance is thought to be a viable alternative to mitigate the financial risk associated with the catastrophic events like the flood that occurred in 2010. The study utilized primary level data from five districts in Pakistan to evaluate the willingness to pay for flood insurance as well as the factors affecting that willingness by using contingent valuation methodology. The results show that the acceptability of this intervention among flood victims depends on a multitude of factors such as the age of the household head, landownership, off-farm income sources and a preconception concerning the effectiveness of flood insurance. Moreover, rural families’ readiness to pay an insurance premium is not significantly influenced by perceived risk of flooding but by their financial position.

Mindfulness Training for Indian Armed Forces

Defence Institute of Psychological Research (DIPR), a laboratory of Defence Research and Development Organisation (DRDO), had conducted two studies.One of Psycho-Social aspect of optimizing operational efficiency of Security Forces to combat during (September 2000; May 2005) in North Eastern Region. The major outcomes of study are: Three main operational stressors, like fear of torture, uncertain environment and domestic stresses are responsible for most of psychological problems in various groups of Armed Forces. Middle rank officers as compared to Jawans and Junior Commissioned Officers (JCO) were found to be more vulnerable and stressed out.Mental disorders in form of Post Traumatic Stress Disorder (PTSD) have been observed in traumatized troop, which forms basis for various somatic symptoms. About six to nine months after detention of captured militants is most appropriate period to change in attitudes of youth and influence their minds towards national identification.There is a strong need to inoculate and orient officers by undertaking Combat Stress Management training programmes. Need for immediate therapeutic intervention during post-traumatic stress disorders jointly by unit leaders and professional psychologist. There is a strong need to carry out a appropriate need analysis with respect to demographic variables of a particular region.Another study was carried out in December (2006) on Suicide and Fratricide among troops deployed in counter insurgency areas and suggested a number of remedial measures to deal with stress related issues in Army. Some of suggestions are: liberalized leave policy, deployment of psychological counsellors in counter insurgency areas, periodical review, monitoring and analysis of stress related incidents, organizations of stress management training programmes and disseminations of reading materials on stress management in appropriate languages, etc.The remedial measures to manage stress have been implemented in entire Army both in field and peace areas. This information was given by Defence Minister Shri AK Antony in a written reply to Shri Motilal Vora and Shri Satyavrat Chaturvedi in Rajya Sabha. The studies emphasize need for an effective psychological technique for Armed Force.Stress management in armed forcesRecommendation (Para No. 2)The Standing Committee on Defence (2009-2010) Committee in their 21st Report had recommended as under:The Committee understand that demand on personnel of Indian Armed Forces have been increasing over years due to changing operational commitments of diverse nature. At same time, they are required to meet aspirations of their family members for a good quality life on account of rapidly changing socio-economic conditions in society.Undoubtedly, inability of soldiers to solve their family problems due too perational requirements and other constraints within which they have to work and non-fulfillment of some of their expectations in certain cases results in enhanced negative stress leading to a variety of illnesses and behavioral problems including suicide, fratricidal killing, early mortality or desertion from Armed Forces. The Committee wishes to point out that besides adversely affecting efficiency and performance of defence personnel due to impaired motivation, negative stress level also put additional burden on public exchequer in form of man-days lost dueto sickness, cost of medical treatment and loss of trained officers and soldiers. To utter dismay of Committee, Ministry of Defence have made an attempt to downplay magnitude of problem by putting for ththe plea that, the overall psychiatric morbidity in Armed Forces has been less than national figures. Equally specious is plea advanced by Ministry of Defence that there is a rising trend of psychiatric illnesses in our country over last few decades and Armed Forces personnel being drawn from same society are not immune to these influences. …

No-subsidy mantra of governance to attain the most efficiently competitive economy

This paper proves the existence of a practically implementable system of governance necessary to attain the most efficiently competitive economy without the arduous collection of private information on individual preferences through a central planner. This governance is constituted with tenets:(a) adoption of only known commonly agreed rules like (i) common civil codes of conduct and (ii) penalties for robbery, killing and usurpation of public and private wealth and (b) an irrevocable mandate to frame any new commonly agreed rule that may be discovered in future or to repeal or amend any prevailing rule which may be ascertained in future to be preferentially catering to subsets of people. The only feasible available norm for common agreement to set rules is self-sufficiency of each group like the households and companies. Self-sufficiency or no-subsidy mantra is defined by the net surplus (production minus consumption) of a group being greater than the transfer from the public exchequer to the group.

Methods used to procure infrastructure projects in Pakistan: an overview

In Pakistan, the need for infrastructure is immense while resources and capital are scarce commodities. The government estimates the public exchequer cannot even meet half of the funds required for infrastructure development. This paper investigates the methods used in Pakistan to procure infrastructure projects. This paper is a part of doctoral study of procurement practises of developing countries. Through literature and archival analysis, it discusses the project approval and procurement process in public sector in Pakistan. With the help of in depth case interviews and in light of the literature it discusses the advantages and disadvantages of the methods used in Pakistan. The findings reveal that there are two distinct methods of infrastructure project procurement in public sector in Pakistan, i.e., the traditional method and the non-traditional method, i.e., public private partnership (PPP). It is also found that there are constraints in project approval process hence causing problems in implementation. The driving forces for the non-traditional method in comparison to the traditional method are also limited.