12 January 2004	Monday	19 Ziqa'ad 1424

ISLAMABAD, Jan 11: The pro-poor budgetary expenditure in eight core sectors, out of a total 16, has declined during the first quarter of the current fiscal year when compared with same period of last year.

The first quarter (July-September) official report on poverty-related expenditure suggest that disbursement under social safety interventions also dropped in three out of five areas, including food support programme, zakat and state land recipients.

The areas where the poverty-related expenditure has reduced include water and sanitation, health, population planning, natural calamities and disasters, irrigation, rural development, low cost housing and food support programme.

A comparison of the data reveals that expenditure on water supply and sanitation was lower than the first quarter of last year by 6.54 per cent, 6.35 per cent in health, 31.24 per cent in population planning, 9 per cent in natural calamities and disasters, 1.3 per cent in irrigation, 29.7 per cent in rural development, 23 per cent in low cost housing and 39.4 per cent in food support programme.

This drop in expenditure has taken place despite the new policy of expenditure management allowing the federal ministries to spend 50 per cent of the public sector development programme (PSDP) allocations in social sector and 45 per cent in other sectors during the first half of the financial year without reference prior approvals.

However, in overall terms, the PRSP expenditures during the first quarter of fiscal 2004 were Rs49.334 billion against Rs36.99 billion for the corresponding period of fiscal 2003, showing an increase of 33.4 per cent.

Major areas where the PRSP-budgetary spending has increased during the first quarter include 256 per cent in roads and bridges, 26 per cent in education, 46 per cent in social security, 11 per cent in land reclamation, nine per cent in law and order, 92 per cent in administration of justice and 1011 per cent in food subsidy.

The federal government, however, claims that it has spent 90 per cent more during the first quarter of fiscal 2004 than the corresponding period of last year. The increase was 58 per cent in Punjab, 7 per cent in NWFP and 19 per cent in Balochistan. Sindh, however, registered a decline of 11 per cent.

The government also claims that provinces have been asked to gear up the pace of expenditure in the sectors that are lagging and keep track to ensure meeting quarterly quantitative targets..

The finance ministry, however, attributes this to operational snags and the ongoing devolution process. Under the World Bank and IMF directives, the PRSP expenditures range has been expanded to include spending on law and order, administration of justice and village electrification because of their close nexus with determinants of poverty.

As such, based on June (final) reconciled civil accounts, the PRSP expenditures with extended range and scope during 2002-03 was Rs208.840 billion as compared to Rs167.28 billion in 2001-02 for the same sectors, an aggregate increase of 24.8 per cent.

Under the Zakat programme, over 72,000 persons were provided Rs146 million assistance during this period. Majority of Zakat beneficiaries get fixed stipends of upto Rs500 as guzara allowance.