Spending for parliamentarians’ schemes sees boost amid PSDP squeeze

Published December 3, 2022
<p>Finance Minister Ishaq Dar chairs a meeting of the Economic Coordination Committee in Islamabad. — PID/File</p>

Finance Minister Ishaq Dar chairs a meeting of the Economic Coordination Committee in Islamabad. — PID/File

ISLAMABAD: While the country’s normal development programme has slowed down with fiscal constraints, the government has accelerated spending on Sustainable Development Goals (SDGs) — a portfolio of smaller schemes recommended by the National Assembly members.

A meeting of the Economic Coordination Committee (ECC) of the cabinet, presided over by Finance Minister Ishaq Dar, on Friday approved an immediate disbursement of more than Rs16 billion for village electrification and civil works for various housing projects, predominantly in Punjab and Sindh. Electricity schemes in Khyber Pakhtunkhwa and Balochistan are also part of the plan.

The ECC also approved the import of about 33,000 tonnes of urea through an open tender that was almost 20pc cheaper than the offer on a government-to-government basis from Azerbaijan’s state-owned firm Socar.

The ECC also granted an additional fund of over Rs349 million, over and above the amount allocated in the budget, for VVIP visits abroad. The finance ministry confirmed in a statement that the ECC had approved a supplementary grant of “Rs8109.772m in favour of the Ministry of Energy (Power Division) for the execution of development schemes in Punjab, Sindh, Balochistan and KP under Public Sector Development Programme (PSDP)”. It also approved another grant of “Rs8,000m in favour of Ministry of Housing and Works”.

ECC clears urea import, debt relief pact

On Oct 17, the government formally enhanced the size of SDGs portfolio by Rs17bn to Rs87bn to ensure that all 174 MNAs belonging to PDM get Rs500m worth of small schemes — sewage lines, gas, water and electricity connections, and repair and maintenance of streets — in the name of SDGs.

Informed sources said the Cabinet Division, the custodian of SDGs-related PSDP funds, surrendered Rs8.11bn to the Power Division and Rs8bn to housing ministry for execution of development schemes in various constituencies across the country.

On the other hand, total development expenditure in July-Oct FY23 amounted to Rs98.78bn compared to Rs178bn in the same period last year. Total expenditure, thus, stands at just 12.37pc of total PSDP allocation of Rs800bn – drastically short of the target mechanism for development spending about 30pc in these months. The PSDP has since been poised to be cut to just Rs350bn from the budgeted Rs800bn to ensure compliance with IMF targets.

The ECC allowed the economic affairs ministry to sign a debt rescheduling agreement with Japan Bank for International Cooperation worth $26.150m under the G-20 Debt Service Suspension Initiative (DSSI). This debt relief was announced in April 2020 for poor countries to mitigate the socioeconomic impact of Covid-19. Pakistan has so far secured and signed cumulative debt relief agreements worth $3.688bn under three DSSI relief stages.

The ECC also approved a summary of the Ministry of Industries and Production for the award of the third international urea tender, which opened on Dec 1, for the import of about 33,000 tonnes of urea at $551 per tonne cost and freight rate (CFR).

The ECC had earlier allowed Socar’s offer of $685 per tonne for 35,000 tonnes, but the federal cabinet intervened and ordered an examination of cheaper options as well.

Published in Dawn, December 3rd, 2022

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