Re-Thinking the Benazir Income Support Program

The Benazir Income Support Program, which consists of cash transfers to low income families on a bi-monthly basis, is the largest aid program in Pakistan (accounting for a third of the government budget) that catered to 20 million households in the year 2010-2011. In essence, the BSIP targets the poorest of the poor. Named after the late Prime Minister, the scheme has come under sharp criticism on account of mismanagement, nepotism and political opportunism. Unofficial estimates suggest that only 50-60 per cent of bona fide beneficiaries are receiving assistance under the BISP, with the rest lost in corruption and malfeasance.

The opposition has accused the PPP of manipulating the BSIP as a political tool, in that Sindh, which is the electoral vote bank of the party, has been given preference in the allocation of funds to the effect that Multan, which has half the population of Lahore, has twice as many families receiving stipends of Rs 1000 monthly. Punjab, the most populous province but ruled by the opposition PML-N, has the lowest ratio of beneficiary families – 1,974 families per 100,000 people – of the four federating units. Sindh, the stronghold of PPP, has three-and-a-half times that ratio – 6,829 families per 100,000 people. Lawmakers have also questioned the authenticity of a Rs5 billion poverty survey conducted by the BISP in 2011, the results of which have yet to be made public. BSIP officials have countered by stating that poverty is much more acute in Sindh than Punjab, which enjoys a higher HDI value than its counterpart.  The disproportion was partially explained by the official as follows:  “Poverty scorecard is a scientific instrument and it identifies eligible families based on their poverty score, rather than any other consideration. Poverty varies in different cities according to distribution of resources – hence the poverty level in Thar cannot be compared with that of Lahore, Rajanpur cannot be compared with Rawalpindi and Benazirabad cannot be compared with Karachi”.

There should be no politics on poverty. A survey carried out in Sindh, the home of Benazir Bhutto says, “The major problems are the identification and selection of beneficiaries (of BISP), lack of coordination between government tiers and political favoritism. Initially, all Members of Provincial Assembly (MPAs) were given around 8,000 forms to distribute in their respective constituencies, which meant that most MPAs gave away the forms to their own people”. How can you postulate that in Karachi, for instance, there is an equal number of poor in a posh area like Clifton as well as in the Kachi Abadis of Lyari. Apart from charges of financial corruption and political point scoring, the idea of doling out billions without any condition attached is simply unsustainable in the long run. Conditional cash transfer programs in Latin America have experienced greater degrees of success because recipient families must meet certain requirements before receiving a cash payment.

Alternatively, one could question the worth of giving Rs 1000 monthly as handouts to poor families, in that the amount provided, given the level of consumer price inflation, is so insubstantial, as to be literally wasted. This question was posed in an Pakistan Today article that attacked the BSIP: The monthly amount of Rs1,000 that they receive, however, falls drastically short of Rs2,550, (calculated on a dollar a day earning) required to stay above the poverty line. On average, Rs1,000 is divided by a family of six, coming down to Rs167 per person. This is a mere 6.5 per cent of the required amount and equals to Rs5.50 per head per day in this case. The amount is well below the price of two ‘rotis’ essential for one meal along with a plate of vegetable or lentils that costs even more. How can this change the widening poverty gap of the country, which according to a survey has crossed 50 percent?

Instead if the 100 billion Rs could be invested in infrastructure or power projects, the benefits accrued could be potentially higher, for a larger share of the populace. The budgetary allocation for the BSIP has also had an adverse impact on other aid programs: The annual progress report states that Pakistan Bait-ul-Mal (PBM) disbursements declined by 34 per cent in 2009-10 due to the merger of its flagship Food Support Programme, into the BISP. In 2008-09, under the PBM the government spent Rs3.5 billion that dropped to Rs2.3 billion in the next year.

The culture of dependency fostered by this scheme would only pull families further into the “poverty trap”, by providing a disincentive to work and promoting indolence. The example of the Grameen Bank in Bangladesh which placed conditions on the amount disbursed and hence inculcated a sense of responsibility into the recipients is a telling one. The Pakistani government should attempt to recalibrate the existing model of the BSIP, by seeking to engage the poor in a partnership that fosters a long term solution to the problem by breaking the “poverty trap”. Countries do not progress on the basis of charity; rather they do so through advancements in science and technology, higher education and vocational training. Provision of skills and female empowerment remain crucial for this purpose. The need for investment in human capital and the way forward for BSIP is best captured by the following quote: “Give a man a fish, and he’ll eat for a dayTeach a man to fish, and he’ll eat for the rest of his life”.


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