ISLAMABAD, Feb 13: The federal government has decided to divert funds from many slow moving projects to other more deserving projects to maximize utilization of Rs160 billion Public Sector Development Programme (PSDP 2003-04).

Sources in the planning commission told Dawn that a special meeting of the Executive Committee of the National Economic Council (Ecnec) has been scheduled for Feb 18 to finalize recommendations for restructuring of the PSDP for the remaining five months of the current fiscal year.

The sources said Ecnec's recommendations would be submitted to the National Economic Council (NEC) which is likely to meet before the end of the current month to give final approval to the reallocations. The NEC meeting would be presided over by Prime Minister Mir Zafarullah Khan Jamali.

The sources said the federal government had written to the provincial governments, federal ministries and public sector corporations, last month, to submit their progress reports and suggest where the fund utilization was slow or facing problems so that re-adjustments could be made for better utilization of allocated resources.

The restructuring of the PSDP would also be based on the progress and monitoring reports compiled by the planning commission independently. The PSDP restructuring is being made owing to continued criticism that public sector expenditure remains short of allocated targets every year and normally huge amounts lapse by end of fiscal year.

The criticism has also been levelled against the quality of utilization of funds mainly as huge amounts are released in the month of June to show higher expenditure ratio.

Ecnec meeting would also finalize the data on public sector development utilization and pro-poor expenditure during the first half of the current fiscal year.

Development expenditure during the first quarter (July 1 - Sept 30) of the current fiscal amounted to a meagre Rs24.851 billion or only 15.5 per cent of its Rs160 billion target for the whole year, official data suggests.

"At this pace of spending, the government would hardly be able to utilize Rs100 to Rs110 billion by the end of the fiscal year against a budgetary allocation of Rs160 billion," said a senior government official.

The public sector spending have remained slow despite the fact that the principal accounting officers of the respective ministries and divisions have been authorized to draw up to 45 per cent of the total allocation without prior approval to ensure maximum utilization, quality implementation and timely completion of the projects.

The defence expenditure during the first quarter of the current fiscal, however, amounted to Rs45.745 billion or 28.5 per cent of the budgetary allocation of Rs160.25 billion for the year 2003-04.

Similarly, the pro-poor budgetary expenditure in eight core sectors, out of a total of 16 sectors, has declined during the first quarter of the current fiscal year, when compared with the previous corresponding period.

The first quarter (July-Sept) official report on poverty related expenditure suggests that disbursement under social safety interventions also dropped in three out of five areas, including food support programme, Zakat and state land recipients.

The areas where the poverty related expenditure has reduced include water and sanitation, health, population planning, natural calamities and disasters, irrigation, rural development, low cost housing and food support programme.

A comparison of the data reveals that expenditure on water supply and sanitation was lower than first quarter of last year by 6.54 per cent, 6.35 per cent in health, 31.24 per cent in population planning, nine per cent in natural calamities and disasters, 1.3 per cent in irrigation, 29.7 per cent in rural development, 23 per cent in low cost housing and 39.4 per cent in food support programme.