Alert Sign Dear reader, online ads enable us to deliver the journalism you value. Please support us by taking a moment to turn off Adblock on

Alert Sign Dear reader, please upgrade to the latest version of IE to have a better reading experience


Discretionary spending on election eve

March 18, 2013

THE PPP-government, led by Prime Minister Raja Pervez Ashraf, has been on a development spending spree till the fag end of its term. More precisely, it spent about Rs47 billion under discretionary People’s Works Programme, that works out, on this count, to about 174 per cent of budgeted amount of Rs27 billion.

Exceeding budget allocation by such a wide margin is not only extraordinary but also a clear manifestation of the tendency to influence voters at public expense even though the Election Commission of Pakistan had defined this practice as pre-poll rigging.

In its last week in office, the government sent more than 100 sanction letters for disbursement of Rs5 billion to the Accountant General of Pakistan Revenue (AGPR) specifically for People’s Works Programme (PWP). The key official at the finance ministry who helped find out ways and means to doing so was immediately rewarded with extension in contract for another year much ahead of completion of his existing contract in April.

These additional funds were arranged through supplementary grants even though the AGPR pointed out an Election Commission notification barring such disbursements and required the finance division to seek clearance from the ECP under article 218(3) of the constitution. The PPP government, however, contended that it had the powers to continue performing its duties till last moment of its constitutional term.

Most governments tend to overspend by relaxing normal spending mechanisms to garner public support. But the PPP government made unprecedented moves to undertake small-scale development and welfare schemes by putting substantial funds virtually at the disposal of party loyalists including the prime minister himself.

The PWP schemes were in addition to blocking allocations of about Rs10 billion for development of a couple of road projects and other schemes in the constituency of Prime Minister Raja Pervez Ashraf bypassing a major condition in vogue that no project could be included in the PSDP whose feasibility studies and PC-Is are not cleared by the Planning Commission, central development working party or executive committee of the National Economic Council at least three months before announcement of federal budget.

Special packages for the constituencies of federal ministers Nazar Mohammad Gondal and Mian Manzoor Ahmad Wattoo are two other examples.

From a legal and moral ground, the PSDP approved by the National Economic Council (NEC) and then the parliament could not be altered without prior approval of the NEC and the parliament.

But in the prime minister’s case, the two road projects worth Rs6 billion were included in the PSDP without PC-I almost four months after the budget and funds were released in full in advance, unlike normal procedure that require quarterly payments in line with the progress on implementation.

Initially, in the first two quarters of the fiscal year, the releases against normal PSDP involving national development priorities were kept higher than 20 per cent required in each quarter under the Planning Commission’s disbursement mechanism.

But then the PSDP was slowed down at the start of the third quarter when the prime minister using his discretion increased the PWP allocations.

This was affected through diversion of funds from strategic development projects that had to be slowed down.

At the end of first week of March 2013, the normal PSDP releases amounted to Rs136 billion or about 58 per cent of the Rs233 billion normal PSDP, excluding PWP and external loans for water sector projects.

Under disbursement criteria put in place after consultations and keeping in view the fact that most development projects took time in start-up stages and required more money in subsequent quarters for their completion, the government is required to release 20 per cent each of PSDP allocation in first two quarters, followed by 25 per cent in third quarter and 35 per cent in the fourth quarter.

Disbursements for People’s Works Programmes are separately being looked after by the Cabinet Division on the directives of the prime minister secretariat and remain outside the vigilance of the Planning Commission.

In such cases, the quality of spending usually remains questionable because no proper mechanism is in place for their monitoring and hence the room for misuse of funds and corruption. Political motives normally dictate the selection of such projects.

The diversion of funds to PWP projects led to a squeeze on PSDP projects and many ventures like health, education and Dera Bugti and Kohlu packages were disturbed.

The self-serving objectives of political patronage and voter support are objectionable but hardly any hue and cry was raised by opposition parties who followed similar pattern at the provincial level.

Even the USAID noted in a recent study that parliamentarians were misappropriating development funds by including politically motivated projects in the PSDP.

“This practice results in two systematic problems: the encouragement of corruption and rent-seeking and the violation of the principles of the annual plans,” the USAID said.

A number of small scale projects remain outside the tightly scrutinised PSDP and are put at almost 25 per cent of the total development programme approved by the parliament for this year. They, therefore, preempt appraisal efforts and designing, and compromise time and resources.

The USAID noted that absence of institutional framework to curb political influence gave vested interests leeway in bringing in politically-motivated development projects.

The funneling of huge resources into politically motivated schemes becomes even more questionable when the country’s overall portfolio of strategic development programmes exceeds Rs4.5 trillion involving more than 3000 national-level projects.

According to Planning Commission, even if no new project was taken in hand, the current portfolio would require more than six years with usual annual plans to complete. By the time they get completed many of these projects would have already lost their economic viability and value.