ISLAMABAD, May 20: The Annual Plan Coordination Committee (APCC) meets here on Saturday to approve an allocation of Rs190 billion for Public Sector Development Programme (2004-05)
, which is about 18.75 per cent or Rs30 billion higher than current year's allocation of Rs160 billion, Dawn has learnt.
The APCC recommendations would be presented to the National Economic Council (NEC) to be presided over by the prime minister on June 3. Notices of NEC meeting on June 3 were sent on Thursday to all the federal members and provincial chief ministers and the AJK prime minister, official sources said.
But the most difficult question before the APCC and the NEC would be the deteriorating utilization capacity of the federal and provincial governments. The expenditure during the first nine months (July-March) of the current year has reduced to 48.6 per cent compared with 58 per cent of the same period last year, official summary for the APCC reveals.
The APCC, to be presided over by Finance Minister Shaukat Aziz, would be presented a Rs180 billion PSDP finalized by the Priority Committee. This includes Rs126 billion for federal projects and Rs54 billion for the provincial projects.
The sources said the federal government would also avail the opportunity of provincial finance ministers' presence in Islamabad on May 22 to seek consensus on National Finance Commission Award, otherwise, previous award would have to be continued for another year.
The low funding utilization during the current year despite higher allocation has been attributed to low disbursements of foreign aid component. During nine months of the current year, Rs12 billion were disbursed as foreign aid against Rs27 billion during the same period last year.
The government is expecting to get Rs55.8 billion as foreign aid component during the next fiscal year to finance these projects while it would generate Rs124.2 billion from its own resources.
The current year's allocation of Rs160 billion had a foreign aid component of Rs44 billion and local funding of Rs116.1 billion. Next year, the foreign aid component and local funding would be 27 per cent and seven per cent higher than the current year.
The APCC is, however, expected to enhance the allocation for federal development programme to Rs136 billion from Rs126 billion approved by the priority committee. Provincial share would remain unchanged at Rs54 billion.
The summary for the APCC suggests that top priority has been given to the social sector and poverty-related expenditure which would get 27 per cent of the total allocation, to be followed by transport and communication sector at 26 per cent of the total allocation.
The power sector is third on the priority list with 17 per cent allocation, followed by water sector at 11 per cent allocations. An amount of Rs72.5 billion has been earmarked in PSDP 2004-05 for various projects of the federal ministries and divisions against Rs61.3 billion allocation during fiscal 2003-04, showing an increase of 18.3 per cent.
The allocation for provincial projects at Rs54 billion is 14.9 per cent higher than current year's allocation of Rs47 billion. Special areas like AJK, Northern Areas and Federally Administered Tribal Areas (Fata) would get Rs10.5 million next year, up by 3.9 per cent against Rs10.1 billion during the current year.
The allocations during 2004-05 would reduce by a significant 18.7 per cent for special programmes like sasti basti and Tameer-i-Pakistan programmes. Next year these programmes would get only Rs7.4 billion against Rs9.1 billion of the current year.
Slow PSDP utilization during the first nine months of the current year shows that the government would have to make maximum releases during the month of June which normally results in large scale leakages and compromises quality of implementation.
The summary to the APCC claims that water sector, power, transport and communication would utilize 100 per cent of their allocated funds before the close of current fiscal year and hoped that target of Rs113 billion utilization would be achieved.
