KARACHI, June 29: The State Bank says that the lower-than-targeted growth in the development expenditures of the government is troubling and it reflects badly on the government's commitment to implement development programmes.
The third SBP quarterly report released on Tuesday points out that the development spending in fiscal year July/June 2003/04 is Rs5.6 billion lower than the budgetary target and terms it a little troubling. The revised estimate shows that development spending would end up at Rs154.4 billion against the budgetary target of Rs160 billion.
The report admits that there are clearly quite valid reasons for many of the delays (that led to lower utilization of development funds). "But the point remains that this shortfall, nonetheless, reflects badly on the government's commitment to implement development programmes, especially given that it is the government itself that made the budgetary allocations after examining the feasibility of the projects and associated problems."
"In particular, these reasons (for lower utilization of development funds) become increasingly meaningless unless there is clear evidence of efforts to remove these bottlenecks for succeeding years."
The SBP report says lower utilization of development funds is attributed to (1) weak systems and processes of planning, approval and execution of development projects (2) inefficiency in respective departments that execute infrastructure projects (3) the cumbersome procedure of the federal government to release funds; and (4) the conflicts between provincial and district governments.
