Proposed Public Sector Development budget Rs660b

ISLAMABAD: For the first time in 63 years, provinces will be able to spend almost half of the overall proposed development budget.

The federal government has budgeted Rs660 billion for development projects for the upcoming financial year, 2010-2011. A working paper prepared by the Priorities Committee for the Annual Plan Coordination Committee, which would be presented on May 21, reveals that in the next financial year, the four federating units would spend Rs321.6 billion on development projects, which is 60.5 per cent more than the allocation of the current financial year.

For the current fiscal year, the provincial development budget is Rs200 billion. On the other hand, the proposed development budget for the federal government is Rs328.3 billion, which is just 9.3 per cent more than the revised development budget of the current fiscal year. For this year, the revised federal development budget is Rs300 billion, states the working paper.

The National Economic Council, headed by Prime Minister Yousaf Raza Gilani, had initially approved a Rs446- billion federal development budget for the current year but due to scarcity of resources it was revised down to Rs300 billion. Practically, there will not be any significant increase in the federal development budget. The paper states that out of the proposed Rs328.3- billion development budget the available budget is again Rs300 billion, as Rs28.3 billion have been marked as operational shortfall, a technical term which means that though the money has been allocated, it is not available for spending.

Provincial financial autonomy is becoming a reality after the share of the provinces in the total resources of the country was increased under the seventh National Finance Commission Award. Under the new Finance Order, the share of the provinces has been increased from slightly over 45 per cent to 56 per cent for the first year of the award and to 57.5 per cent for the next four years. The reduction in the federal share has compelled the Ministry of Finance to cap the development budget of the centre.

The Planning Commission has objected the cap and recommended that the Annual Plan Coordination Committee increase the centre’s development budget from Rs328.3 billion to Rs400 billion. “To maintain the momentum of development and to accommodate present government’s development priorities… it was necessary for the Public Sector Development Programme to be enhanced to a level which would create employment, reduce poverty, and achieve Millennium Development Goals,” the Planning Commission argues in the working paper.

The Annual Plan Coordination Committee, headed by the deputy chairman Planning Commission, Dr Nadeemul Haq, is meeting on May 21 to approve the Rs660 billion development budget and consider the Planning Commission’s request to increase it to Rs721 billion, adding Rs72 billion to the centre’ share. The National Economic Council would later consider the Action Plan Coordination Commission’s recommendations. The Priorities Committee met this month to finalise the development budget.

Out of Rs328.3 billion, it has recommended Rs192.6 billion for federal ministries and divisions. The amount is merely one per cent more than the revised budget for this year, Rs190.5 billion. Meanwhile, Rs69.4 billion development budget has been proposed for corporations, which is 36.4 per cent more than the revised budget of Rs50.9 billion for the current fiscal year. An amount of Rs55.97 billion has been recommended for the National Highway Authority as against the current allocation of Rs36.9 billion. Water and Power Development Authority may get Rs13.4 billion which is Rs600 million less than the revised allocation of the current financial year.

For Azad Jammu and Kashmir (AJK), Gilgit- Baltistan and Federally Administered Tribal Areas (FATA), Rs32-billion development budget has been recommended, a 25 per cent increase from the revised budget. The AJK government would get Rs14 billion, Gilgit-Baltistan Rs8 billion and FATA’s Rs10 billion. The Priorities Committee has proposed Rs34.4 billion for special programmes and Rs10 billion for Earthquake Reconstruction and Rehabilitation Authority, states the working paper.

Published in the Express Tribune, May 20th, 2010.