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KMC budgets: Why they went up and down

SAMAA | and - Posted: Sep 5, 2019 | Last Updated: 10 months ago
SAMAA | and
Posted: Sep 5, 2019 | Last Updated: 10 months ago
KMC budgets: Why they went up and down

Even a class five student will be able to read the graph of Karachi’s budgets over the last 20 years. The numbers go up—but then they go down. This hump doesn’t quite do justice to the rollercoaster ride that it has been.

There is an unspoken law for budgets: they increase with time. Just think of your household expenses. “So normal budgets tend to go up but this is not in the case of KMC,” explained Khalid Mahmood Shaikh.

Khalid sahib used to be the city’s finance advisor. He is currently posted to the Public Private Partnership unit in the Sindh government and was, for a brief whiff, the MD of the Karachi water board. What was his answer to the question: how come Karachi is so rich and its government so poor?

Khalid sahib is, like all bureaucrats, fairly strongly opinionated but unlike most of them who become more cautious while dealing with the media over their careers, he might have become more vocal. “KMC ko band kar dena chahye,” he said. They should just shut KMC down. It was a financial disaster.

Let’s go back two decades and start with the city’s budget in 2001. It was 5.7 billion rupees. The next year it quadrupled to Rs20b. Something had happened, for it is abnormal to have such a big jump unless something had changed.

That something was a barrel-chested army chief with delusions of grandeur: Pervez Musharraf, who had a soft corner for Karachi. He did what essentially other military dictators had done (Ayub, Zia): tinker with the way power, control and money filters down to the smallest unit of administration in the country.

Ayub had started designing this system and deceptively called it Basic Democracies. Bhutto, and then Zia, were the first to call them local governments, and by the time Musharraf rolled into town, he came in tow with his extended-remix version.

Elections were held under the Musharraf system in 2001 and the Jamaat-e-Islami’s Niamatullah Khan became Karachi’s nazim (mayor). The city government’s name changed from KMC to CDGK or city district government Karachi.

Before Musharraf, cities in Sindh were run under the Zia-era law from 1979, which went into great detail on KMC’s job. It was the Karachi Metropolitan Corporation’s job to: plan, develop and maintain, the sewage system, the water supply, stormwater drains, roads, streets, zoos, parks, playgrounds, beaches, graveyards, firefighting services. It could run the milk supply for the city, markets, food quality checks. It could do master planning, building construction control, zoning, commercialisation.

Musharraf radically altered this system and gave the city government control of 23 Sindh government departments. As the CDGK was fattened up, its staff and budgets bulged. This explains why the budget jumped from Rs5.7b to Rs20b in just one fiscal year.

Karachi’s city government was also flush with cash because Musharraf pumped money into it through his Tameer-e-Karachi programme: a 29-billion-rupee gift package. That money was supposed to come from the Karachi (Rs6b) and Sindh governments (Rs6b), Islamabad (Rs5b), and major institutions that were supposed to cough up cash (Rs12b).

From 2002 to 2003 and 2004, we see the anticipated gradual inflation-propelled increase in the city budget from Rs20b to Rs27b.

Elections were held in 2005 and during City Nazim Mustafa Kamal’s time, Karachi had Rs42b and its budget continued to climb on the back of Musharraf’s largesse.

The Tameer-e-Karachi package was what you call “grant in aid” which, to explain, is like granting someone money to aid them to do one specific thing. In this case Musharraf’s money could only be used to build things. Mustafa Kamal couldn’t use it for any other spending. This was one reason why you saw him pour his love affair with asphalt down Karachi’s throat. Those flyovers you see today? Thank him.

By 2008, the party was winding up and the budgets were buckling. “The most probable cause would be the Tameer-e-Karachi funds ending,” said Khalid sahib. This was also the time that the Pakistan Peoples Party won the general elections and came to power in Sindh after Benazir’s assassination.

By 2010, Musharraf’s 2001 local government system legally ended and no one wanted to keep it alive by reviving the law. So the nazims were chucked out and administrators were handpicked to run the show. The CDGK was history.

Eventually, the PPP brought back the 1979 system under its Sindh local government ordinances and called the city government by its old name of KMC once again. All those big 23 departments that had been added to CDGK were amputated. The budgets slid slowly down, 31-35-33-26 billion rupees.

This is why Khalid sahib estimates that: “For the last seven or eight years, the eclipse started on municipal services.”

To read the next article of the series on Local Government, click on the image below

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