The government's decision to allocate Rs202 billion to the Public Sector Development Programme (PSDP) in the coming budget is encouraging. Keeping in mind the pressing need for reducing poverty, ensuring good governance, generating employment and raising the quality of social services, the higher allocation promised for these tasks will help achieve the targets set for the coming year.
The government has been able to allocate much needed funds in critical areas like education, health, water, power and infrastructure. This will go a long way to ensure timely completion of vital projects that the country needs for its growth and prosperity.
Till now, many of these areas have been neglected in previous budgets. One hopes that with enhanced allocations in the coming budget, vital social sector projects will be taken up for implementation and those incomplete will be carried forward to provide benefits to the common man so that more opportunities for employment are created and serious efforts are made to contain the rising incidence of poverty.
However, what is disappointing is the poor track record in utilizing the funds allocated under the PSDP. The report that about one-third of the development budget for the current year will lapse for slow fund utilization is a case in point.
Out of a total of Rs160 billion allocated for the PSDP for this year, Rs78 billion was utilized in the first nine months. This may increase to some extent by the end of the year, but there will still be a large gap between what was allocated and what was actually used.
The non-utilization is routinely blamed on low disbursements of the foreign aid component of funding. But little has been done to address this problem. As a result, a number of development projects would see their progress halted for lack of funds which are technically still there.
This is most unfortunate, as most of these projects would have helped in bettering the lives of people in different parts of the country if completed on time.
What is ironic is that while the money for these projects was made available by the government, the usual bureaucratic red-tapism came in the way of its release on time.
In such a situation, higher allocations promised for public sector development would be of no consequence unless the utilization capacity of the federal and provincial governments is improved.
While the government did try to address this problem with a decision in March that development funds would not be allowed to lapse for three years, it is now apparent that the implementation of this decision is being hindered by legal and technical difficulties.
The government needs to come up with some solution to this problem at the earliest. At stake are the billions of rupees badly needed for poverty alleviation and employment generation.