"The economics behind the Lahore Metro Bus Service
According to the Punjab government, 30 billion rupees is the amount of money spent on the Lahore Metro Bus Service. The actual figure may be a lot more, but let’s just take their word for it and apply a bit of perspective to it instead."
There are many misunderstandings with the economics that has been calculated. But I will discuss only one. There has been quoted that:
Out of total budget of Rs 63 billion allocated for infrastructure development nearly 50% have been spend on Metro Bus Service and similarly out of total Rs 25 billion for education sector 5 billion spent for laptops
First Clarification:
We can not compare above mentioned Rs 63 billion of infrastructure to that of Rs. 30 million on MBS in this simple fashion. The reason is that all the projects under Rs 63 million are NOT started during current year and WILL NOT complete during current year. More than 90% of these projects were started last year and many will continue next year as well but MBS project started and completed during current year. If we really want to make this comparison then we may have to add (very roughly speaking) some Rs 50 billion last years allocation, Rs 63 billion current year allocation and some Rs 75 billion for next years allocation (if we assume that there are not any project more than 3 years time span and we know what is speed of our implementing project). And now if we see Rs 30 billion out of 188 billion then picture seems quite different.
Second Clarification:
This Rs 63 billion is not the only money allocated for infrastructure. It is mere managerial division at departmental level. If we really want to see how much money goes on infrastructure in Punjab kindly see that most of following funds (roughly may be more than 80%) are also spend on infrastructure by district government in contrast with provincial government:
1) District packages = 12.4 billion
2) Accerelated district packages = 5 billion
3) Local government and CD = 0.9 billion
4) TMA development programs = 12 billion
5) Equalization grants for district development = 4 billion
If you add 80% of this 35 billion to already calculated Rs 188 billion it will be round Rs 216 billion. And situation becomes more different. Rs 30 billion of to total Rs 216 billion is 14 % rather earlier calculated 50%.
The same case is with health sector and even more worse in education sector. So economics is not so simple. We are learned and these budget documents are meant for us. We should spare some time and do some deeper exercise when making comparisons.
I want to explain other expedient comparisons e.g. example of 10 hospitals and Punjab's total budget but I think this is sufficient if we learn to see things in their true place.
I have quoted all the figures from Budget document of Punjab 2012-13 (in a very casual manner).
http://www.punjab.gov.pk/system/files/Budget_Highlights_2012_13.pdf