ISLAMABAD: The government has increased the pace of releasing funds for development projects, with the first quarter disbursements coming at 350 per cent higher than the same period last year.
The planning commission on Friday said it had released Rs133 billion for development projects in the first three months (July-September) compared to Rs37.7bn of the same period last year when the development portfolio was under stress because of political transition.
As such, the total disbursements in the current year’s first quarter stood at about 19pc of the Rs701bn allocation compared to just 5.6pc of the same period last year. Even the disbursement in the first quarter of FY2017-18 stood at 17pc when the PML-N had released Rs170bn against an allocation of Rs1.001 trillion.
This is the first time in recent history that first quarter disbursements of the Public Sector Development Programme (at 19pc) have come so close to 20pc target for the first quarter. Under the 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 pensions which could go up to 25pc of budget for each quarter.
But almost 60 of the first quarter disbursements this year were grabbed by just four elements. This included Rs27bn releases for security enhancement against a total allocation of Rs32bn. That meant more than 82pc funds allocated for the full fiscal year already stand disbursed.
First quarter disbursement 350 per cent higher than same period last year
The National Highway Authority was also able to have major takeaway with another Rs27bn against a full-year allocation of Rs155bn, showing utilisation of about 17pc. The NHA has been complaining about non-disbursement of funds and only a few days ago protested in public that it did not receive any funds over the last six months.
Another major chunk of Rs12bn was released for the development of merged tribal districts of Khyber Pakhtunkhwa for which the government has allocated Rs48bn for the current year. Likewise, an amount of Rs14bn was provided to the water sector against an allocation of about Rs86bn.
Moreover, another big share of Rs8bn was released to the cabinet division for five major development projects in Karachi and smaller schemes under the Sustainable Development Goals. The Rs2bn releases for SDGs were made through ruling party lawmakers.
The planning commission said the finance ministry had made a lump sum payment of Rs26.78bn in August for security enhancement for which Rs32.5bn had been allocated in the PSDP of 2019-20.
This Security Enhancement and 10-year development plan for merged districts of KP are among the six PSDP funds managed by the ministry of finance with a total allocation of Rs126bn. No funds were released for four other finance ministry-operated projects including Rs32.5bn for special development programme for temporary displaced persons, Rs10bn for PM’s Youth and Hunarmand Programme and Rs3bn for Clean Green Movement and Gas Infrastructure Development.
The rest of the PSDP implementation remained slow as shown in funds released for development as of October 4, 2019. According to official data released by the planning commission, the government has disbursed Rs55bn to the country’s normal development programme of federal ministries so far this fiscal year against an allocation of Rs328bn, or 17pc.
Gilgit-Baltistan was provided Rs3.07 bn compared to more than Rs7bn last year, showing a decline of more than 50pc. Azad Kashmir has been provided with Rs4.9bn so far during current year compared to Rs4.74bn last year.
The government has also released Rs5.74bn to the Higher Education Commission this year compared to Rs4.6bn of the comparable period last year while Rs4.9bn have been provided to Pakistan Atomic Energy Commission this year against Rs4.7bn for the same period last year. The ministry of railways has been given Rs2.7bn so far this year compared to Rs4.1bn released for the same period last year.
This comes following a fresh policy for release of funds for fiscal year 2019-20 notified by the ministry of finance recently. All ministries, divisions, provincial and regional governments have been directed to follow quarterly targets.
They have been informed that cases relating to international and domestic contractual or obligatory payments beyond the above limits shall be considered on a case-to-case basis and relaxation shall require prior approval of the secretary of the finance ministry.
In case of the PSDP, the finance ministry has notified that no funds shall be released for un-approved projects and funds for the first quarter, not exceeding Rs500 million, shall be released by the Planning Division. Amounts exceeding Rs500 million shall be referred to the Budget Wing of the Finance Division.
Published in Dawn, October 5th, 2019