ISLAMABAD: The government has released about Rs27 billion Public Sector Development Programme (PSDP) funds for security enhancement, jacking up total development spending to Rs50.5bn in less than two months of the current fiscal year.

The Planning Commission on Monday said that the finance ministry had made a lump sum payment of Rs26.78bn for security enhancement for which an amount of Rs32.5bn had been allocated in the PSDP 2019-20. That means more than 82pc funds allocated for the full fiscal year already stand disbursed.

As a result, the total development spending has so far surged to Rs50.5bn or almost 67 per cent higher when compared to about Rs30.3bn of almost similar period last year. The total releases out of PSDP this year have therefore improved to 7.2pc of a total annual allocation of Rs701bn compared to 2.94pc (Rs30.3bn) of last year’s total allocation of Rs1.030 trillion.

This is one of the six PSDP funds managed by the finance ministry with a total allocation of Rs126bn and the security enhancement is the only area for which funds have been released. As such, not funds have been released against Rs48bn allocation for the development of merged tribal districts, Rs32.5bn for special development programme for temporary displaced persons, Rs10bn for PM’s Youth and Hunarmand Programme besides Rs3bn for Clean Green Movement and Gas Infrastructure Development.

Rest of PSDP releases remains slow, latest data shows

The rest of the PSDP implementation remains slow as shown in funds released for development as of Aug 23.

According to official data released by the Planning Commission, the government has disbursed only Rs23.7bn to the country’s normal development programme so far this fiscal year, down 28pc over comparable period last year.

The commission reported that Rs13.18bn was released as of Aug 23 for development programme of the federal ministries and divisions compared to Rs18.4bn of the same period last year, showing a reduction of almost 28.4pc.

The National Highway Authority (NHA) was given Rs2.7bn while power sector and water sector were not disbursed any funds during the period. Gilgit-Baltistan was provided Rs2.65bn compared to Rs7bn last year, a decline of 62pc. Azad Kashmir has been provided with Rs4.66bn so far during current year compared to Rs4.74bn last year.

The government has also released Rs4.447bn to the Higher Education Commission this year compared to Rs4.632bn of the comparable period last year while Rs4.27bn have been provided to Pakistan Atomic Energy Commission this year against Rs4.67bn of same period last year.

The Ministry of Railways has been given Rs1.3bn so far this year compared to Rs3.34bn same period last year, a reduction of 61pc.

This comes following a fresh policy for release of funds for fiscal year 2019-20 notified by the ministry of finance a few days ago. All ministries, divisions, provincial and regional governments have been directed to follow the notified strategy for release of funds relating to current and development expenditure for 2019-20 before effecting the payment.

Under the new policy funds for current and development expenditure have to be released at the level of 20pc each for first and second quarter, and at the level of 30pc each for third and fourth quarters, except the disbursement of funds required for payment of salaries and pension could go up to 25pc of budget for each quarter.

The cases relating to international and domestic contractual or obligatory payments beyond the above limits shall be considered on case to case basis and relaxation shall require prior approval of the secretary of the finance ministry.

Under the policy, the organisations and entities that are provided single-line budge are required to provide their annual budget including detailed head-wise expenditure and own receipts for current financial year and last financial year.

The notification said that all payments shall be made through the pre-audit system of the Accountant General Pakistan Revenue (AGPR), or through Assignment Account procedures issued by the finance division. Any direct payment through the State Bank of Pakistan shall be made as a special case, with the prior approval of the finance secretary.

All the ministries, divisions and entities have been directed to route their proposals for supplementary grants or technical supplementary grants through the Budget Wing of Finance Division under a template provided to them before their approval by the finance ministry for onward submission to the Economic Coordination Committee of the Cabinet.

In case of PSDP, the finance ministry has notified that no funds shall be released for unapproved projects and funds for first quarter, not exceeding Rs500 million, shall be released by the Planning Division. Amounts exceeding Rs500 million shall be referred to Budget Wing of Finance Division for ways & means clearance.

Funds for second quarter onwards will be recommended by the planning division after due examination and scrutiny to the finance division for ways and means clearance along with a cash or work plan, utilisation report of funds duly reconciled with AGPR and approval of Principal Accounting Officer of the concerned ministry or division.

If for any project, no funds have been released during the first two quarters, only 40pc of the allocation would be released for remaining two quarters.

Published in Dawn, August 27th, 2019