PESHAWAR, July 6: The NWFP government's budgetary allocation for expenditure under the foreign aid projects for the 2006-07 financial year are in sharp contrast to what the government has projected for the same period under its Medium Term Budgetary Framework (MTBF).

In its budget for the 2006-07 financial year, the provincial government has projected to incur a total expenditure of Rs7.7 billion under the development schemes to be executed with the help of foreign aid - mainly loans from the Asian Development Bank, World Bank, Swiss Development Agency and some bilateral donors.

However, the Rs7.7 billion development outlay is far higher than the total amount of foreign aid which the government has estimated to utilise during the 2006-07 financial year under the MTBF, which provides a roadmap for fiscal operations.

The government, according to official documents, has estimated to incur total expenditure of Rs2.5 billion under the foreign aid projects during the 2006-07 financial year, much less than the expenditure estimates projected under the province's budget and development outlay presented on June 17.

The MTBF, put forth a period of four years starting from July 1, 2006, forecasts the provincial government's expenditure under the foreign aid projects to remain at Rs2.5 billion during the 2006-07 financial year.

In the 2007-08 financial year expenditure against foreign aid projects has been estimated to be about Rs3.1 billion during the 2007-08 financial year, Rs3.9 billion during the 2008-09 financial year, whereas, Rs5.1 billion would be spent during the 2009-10 financial year.

The roadmap put forth for the next four financial years does not reflect that the provincial government would be able to spend Rs7.7 billion during one single year in any of the next four years.

Officials said that though the government had made a higher side projection of expenditure under the foreign aid projects in its current financial year's budget, the same could not be done under the MTBF - a document which is prepared in line with an agreement with the World Bank.

"The government can not give figures other than real under the MTBF," said an official.

The province, according to sources, is constrained to reflect low side figures under the MTBF simply because of the fact that its line departments and projects' executing agencies do not have the capacity to spend more during a single year.

The provincial government had estimated to spend Rs6.8 billion under the foreign aid projects during the 2005-06 financial year. Under the revised estimates of expenditure, the government has projected to spend Rs6.4 billion.

However, expenditure incurred during the first nine months of the last financial year does not leave the government with bright chances to meet even the targets of expenditures set under the revised estimates.

The province had spent a total of Rs1.4 billion during the July-March period of 2005-06.

Officials said that the line departments and project executing agencies by no means could spend Rs5 billion during three months of the 2005-06 financial year to turn the revised estimates of expenditure of foreign aid projects into a reality.

“In view of its past track record, one can expect the province to end up with expenditure of about Rs2 billion under the foreign aid projects at the close of the 2005-06 financial year,” said an Islamabad-based official.

Officials said that the provincial government had a tendency to make higher side projections under the annual development budgets to achieve political mileage by projecting an over-sized development outlay.

According to sources, it is only because of lack of capacity on the part of project executing agencies that made the government to end up with less development expenditure.