PESHAWAR, Feb 10: The size of the NWFP’s annual development programme (ADP) for 2002-03 is set to undergo a substantial cut due to the provincial government’s increasing financial constraints, according to official sources.
“The ADP size may experience a reduction of around Rs5 billion or even more than that by the close of the current fiscal year,” sources in the Planning and Development Department told Dawn.
Terming the downward revision in the ADP’s size as “imminent and unavoidable,” well-placed official sources attributed the same to the ‘over ambitious’ financing plan the last provincial government had prepared to carry out developmental activities in the province during 2002-03.
The ADP for 2002-03 envisages an all time high development expenditure involving a total of Rs13.673 billion.
The development plan included a resource gap of over Rs7.9 billion which the last provincial government had announced to fill with the help of various internal and external resources.
The last provincial government had estimated to arrange Rs1.89bn through resource mobilization measures and savings against the current revenue expenditure account to partially fill the resource gap.
Similarly, in accordance with the provincial government’s annual budget statement for 2002-03, the then likely proceeds of World Bank’s Rs5.4bn structural adjustment credit was also to be utilized to bridge the resource gap.
Although the province received Rs5.7bn under the World Bank’s credit facility instead of Rs5.4bn, the Mutahida Majlis-i-Amal led provincial government is all set to fall far short of arranging deficit financing to touch the all time high development expenditure mark determined under the ADP for 2002-03, said the sources.
“The government is already facing an increasing deficit due to non-availability of its share under the net hydel profit head by Wapda, hence, how could it arrange Rs4.23bn from its own resources to partially fund the ADP,” said a well-placed official.
According to sources, out of the Rs5.7bn loan proceeds received from the World Bank the new provincial government has diverted Rs3.7bn to retire some of the most expensive debts payable to the federal government. Whereas, Rs2bn has been diverted to execute development projects of the social sector including education and health.
The province, said the sources, had not been successful to arrange funds through resource mobilization measures or savings on current expenditure account due mainly to non-disbursement of the provincial share under the net hydel profit by Wapda and shortfall recorded under the direct federal transfers.
Over seven months of this fiscal year have passed and Wapda has released only Rs1bn to the NWFP against its annual net hydel profit share of Rs6bn — the capped share amount the province has been receiving every year for the last 10 years.
“Similarly, the provincial government got direct federal transfers much less than the funds it should have received during this period in accordance with the annual projections made for it by Islamabad for the 2002-03,” said the sources.
Official sources said that though the exercise for downward revision had not yet been undertaken, the cut in the ADP size was on the cards in view of the provincial government’s deepening financial crisis.
A development planner of the provincial government said that though the development projects being run with foreign assistance and World Bank’s SAC facility were not exposed to threats at the hands of financial squeeze being experienced by the government, the part of current fiscal year’s ADP which was to be funded by the provincial resources would undergo a reduction.