The government has once again decided to take away a piece of the budget set aside for development schemes due to financial constraints, making it the second time in less than four months that the public sector development programme will be sacrificed.
The Planning Commission will further slash the size of the public sector development programme at the end of October or early November, said an official working in the department on Thursday.
The first cut in July allowed ministers for the first time to re-appropriate funding from slow moving projects to fast moving projects immediately after commencement of the new financial year. Sources said that the government has considered holding back 10 per cent of the entire development budget in case financial crunch persists.
The Planning Commission will push the executing ministries to first finish those projects where 90 per cent work has been completed. The government is expected to complete over 40 projects this year.
Second priority will be given to projects where 60 per cent or more work has been completed. All projects except strategically important ones that have received less than 30 per cent funding will be delayed unless the fiscal position improves, the official added.
Total amount of the public sector development programme is Rs2,830 billion with a portfolio of 1,252 projects. The number has come down from over 1,900 projects worth Rs4.1 trillion. Seven hundred projects were taken out of the development programme last year alone.
The government transferred 171 projects to the provinces after implementation of the 18th Amendment while most projects approved under political pressure have been stopped.
20% amount released in first quarter
The Planning Commission released Rs44.7 billion in the first quarter (July to September 2011) of the current financial year against total development budget of Rs220.5 billion, excluding foreign funding and prime minister’s schemes. The release is slightly lower than the quarterly ceiling of 21 per cent. However, it is not yet clear whether the executing agencies have spent the entire amount of Rs44.7 billion.
Total allocation for the federal public sector development programme is Rs290 billion in the current financial year including foreign funding and prime minister’s programmes. PC does not keep trail of the money spent under prime minister’s special programmes and foreign aid committed for projects. For prime minister’s programmes, Rs33 billion has been earmarked while international lenders have committed Rs36.5 billion.
Of Rs44.7 billion released in the first quarter, an amount of Rs26.1 billion or 58 per cent was released for 328 infrastructure projects. Total cost of these projects is Rs2,300 billion and the government could allocate only Rs126 billion in this fiscal year due to lack of funds.
Against Rs124.4 billion allocation for social sector projects, the government released Rs18.2 billion, only 14.6 per cent of the annual share. Currently, 842 projects costing Rs566.2 billion are under way in the social sector.
Some of the projects that received financing in the first quarter include Pakistan Communications Satellite System (Paksat-IR) that got Rs299 million and Greater Water Supply for Quetta which received Rs1.5 billion.
Around Rs2.4 billion was released for Chashma Nuclear Power Project C3 and C4 while land for Diamer-Basha Dam was acquired for Rs3.6 billion.
Despite scarcity of resources, the government provided funding for construction of National Accountability Bureau’s Lahore complex and a red chilli processing centre in Kunri, Sindh. The latter project was approved under the influence of PM Secretariat, according to sources.
Published in The Express Tribune, October 7th, 2011.
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To the extent that this is "cleaning up" the PSDP and is being done in a careful and selective manner, we should welcome it. Get more bang for your buck. It is never just about money; it is viability and ensuring maximum impact.
This is a very short sighted decision.
good governments try and invest in social sectors to improve quality of life of it's citizens.
This government it seems is not interested in social sector development. what a pitty
This is exercise of cutting the PSDP is becoming too predictable and too frequent!