ISLAMABAD: With a cut of Rs85 billion in the budgeted allocation, the government has authorised Rs681bn spending through the Public Sector Development Pro­gra­m­me (PSDP) in the first 11 months of the current fiscal year.

As such, the disbursement of funds in July-May for the PSDP amounted to about 85 per cent of the annual allocation of Rs800bn.

The two key entities spearheading the China-Pakistan Economic Corridor (CPEC) in energy and road network have overspent their full-year allocations in the 11 months. Against an annual allocation of Rs322.87bn, the National Highway Authority (NHA) and power projects have consumed about Rs323.5bn so far, according to the Planning Commission.

It said the NHA was allocated Rs192bn for the construction of roads and highways mostly as part of the CPEC. It has been released Rs193.7bn as of June 2, it added. Likewise, Wapda Power has been released Rs129.8bn in 11 months against its full-year allocation of Rs130.87bn.

This was mainly because of higher-than-projected financing flows from abroad, primarily from China. For example, the NHA was originally allocated a foreign exchange component equivalent of Rs61.3bn for the current year, but Rs78bn of funds actually flowed in, up 27.2pc.

Azad Jammu and Kashmir was another area that was provided Rs15.65bn in 11 months against its allocated share of Rs14.7bn for the whole year. Disbursements under similar block allocations to Gilgit-Baltistan and the Federally Administered Tribal Areas (Fata) in 11 months stood at Rs10.8bn and Rs21.5bn against their full-year share of Rs11.15bn and Rs22.3bn, respectively.

The disbursement of funds for the settlement of displaced people from the tribal region and special security were restricted to Rs61bn against an allocation of Rs100bn.

The government has already cut the PSDP by Rs85 billion to Rs715bn from original Rs800bn announced in the last year’s budget. The cut in the development budget was despite the fact that the foreign exchange component for development projects was greater than anticipated in the budget last year. The project loans and grants for the PSDP were pitched at Rs229bn last year, but actual inflows are now estimated at Rs262bn.

A large number of development projects were made part of the PSDP last year without finalisation of their feasibility studies and approval of PC-1s. About Rs1.626 trillion worth of unapproved schemes and those without mandatory PC-1 papers were made part of the development programme last year. It forced the Planning Commission to re-appropriate funds for 213 projects during the outgoing fiscal year.

At the same time, disbursements for political schemes have increased to Rs42.5bn instead of budgeted Rs20bn. Also, Pakistan Railways was given Rs56bn during the outgoing year against its allocation of Rs41bn.

This was mainly because of start-up problems with tens of hundreds of development projects that were made part of the current year’s PSDP without prior approvals and could not take off.

This is despite claims by Minister for Planning and Development Ahsan Iqbal that the PML-N government has done away with the practice of allowing unapproved projects entry into the PSDP with token allocations to avoid wastage of resources. “The PSDP 2016-17 included 225 unapproved projects worth Rs1.626tr having an allocation of Rs93bn for 2016-17,” official documents said.

The commission claimed it requested the line ministries and executing agencies throughout the year to speed up the submission of project documents and get them approved, but its efforts were in vain. “Despite these efforts, 77 projects of 19 ministries — out of a total of 35 ministries — were still unapproved as of May 10,” the Planning Commission said.

The commission authorised re-appropriation of Rs53.4bn from 213 slow-moving projects to 101 fast-track projects. Through these re-appropriations and adjustments in the PSDP, the Planning Commission expected the completion of 145 projects by the end of the year, having a total cost of Rs68bn.

This was despite the fact that the Planning Commission had decided last year not to encourage new projects, except those falling strictly within the development agenda under the Vision 2025, and projects initiated before 2010 having a throw-forward of Rs15 million were deleted.

Published in Dawn, June 16th, 2017