Govt cuts financing for about 400 development projects

Funds will be diverted to construction of highways, lawmakers’ schemes


Shahbaz Rana February 03, 2018
The decision taken by the PM Office would escalate the cost of around 392 schemes in addition to denying the people intended benefits in terms of improvement in their living standards. PHOTO: FILE

ISLAMABAD: As general elections are around the corner, the federal government has axed financing for about 400 new and ongoing schemes by at least 60% aimed at creating more fiscal space for highways and parliamentarians’ projects.

Also, it has cut the current and development budget of all the federal ministries and divisions by 10% to make room for other expenses ahead of the polls in the middle of 2018.

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The decision to slash funding for around 175 new and 217 ongoing projects has been implemented with effect from January 24, according to documents of the Prime Minister’s Office.

Owing to this, at least Rs200 billion will be diverted to the projects being given priority by the political leadership, said officials in the Ministry of Finance and the Ministry of Planning.

In addition to the PM Office’s directives, the Ministry of Finance has also issued a notification to cut the current and development expenditures of all federal ministries by at least 10%, showed the ministry’s notification of January 31.

Half of the cut will be enforced in the third quarter and the remaining in the last quarter of the current fiscal year.

The decision taken by the PM Office would escalate the cost of around 392 schemes in addition to denying the people intended benefits in terms of improvement in their living standards.

The decision would hit about 38% of the Public Sector Development Programme (PSDP) for 2017-18 that parliament approved in June last year. This year’s PSDP comprises 1,022 schemes, of which the government has targeted about 392 projects.

Of the 1,022 schemes, 429 schemes worth Rs1.32 trillion were new, unapproved schemes and the remaining 573 were ongoing.

“PSDP 2017-18 allocations for unapproved projects, other than the National Highway Authority (NHA) and special programmes, shall be reduced by 60% with immediate effect,” said the directive issued by the PM Office.

It stated that at least 220 new projects were still awaiting approvals from the relevant forums. At the time of making budget, the government included 429 new projects in the PSDP and sanctioned Rs151 billion for their execution.

About eight of them were approved whereas around 40 new schemes of the NHA with allocation of Rs14.7 billion will not be affected by the decision.

Similarly, the budget allocation for around 217 ongoing schemes has been cut by 50% that did not receive any funds from the planning ministry and the finance ministry till January.

“With just five months remaining in the current fiscal year, it would not be possible to utilise allocated funds on 437 projects, consequently a large quantum of public resources that could have been put to better use for public benefit, may be wasted,” according to the PM Office’s directives.

However, officials in the planning ministry said the real motive was to divert at least Rs200 billion to those schemes that would either be executed in the constituencies of PML-N legislators or would give political mileage to the ruling party in the coming elections.

In the first five months (July-November), the government doled out about Rs55 billion to the legislators of PML-N and likeminded parties.

In a recent meeting, the Public Accounts Committee (PAC) observed that “the major flaw in the planning ministry’s working is that it starts new projects despite having very little budget for the ongoing schemes.”

Total resources required for completing ongoing and new projects were estimated at Rs5.7 trillion and at the current level of allocation, the government would need about seven years to complete them, PAC Chairman Khursheed Shah said.

The projects that will be affected fall in the sectors of health, education, infrastructure, energy, water and transport.

More than 70 new projects of the Higher Education Commission, four new projects of the Human Rights Division, about 15 new schemes of the Information and Broadcasting Ministry, around two dozen schemes of the Interior Division, 10 new schemes of the Ministry of National Food Security, five new projects of the Ministry of Health and a dozen projects of the Pakistan Atomic Energy Commission will be affected.

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Likewise, three new schemes of the Pakistan Nuclear Regulatory Authority, about 10 schemes of the planning ministry, around eight projects of the maritime affairs ministry, over one and a half dozen schemes of the Ministry of Science and Technology, two dozen projects of the power sector and two and a half dozen schemes of the water sector will be affected by the decision.

Some China-Pakistan Economic Corridor (CPEC)-related projects including strengthening of the intelligence surveillance systems along CPEC routes will also be affected by the decision.

Published in The Express Tribune, February 3rd, 2018.

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COMMENTS (2)

Jaffer Ali Khan | 3 years ago | Reply Very good reporting. It is unfortunate that there is a chop in funding of development projects but on second thoughts what can the government do with low tax collection figures. The biggest hurdle in development of Pakistan is low tax to GDP ratio and sub-par performance of FBR in tax collection
bashir gul | 3 years ago | Reply "officials in the planning ministry said the real motive was to divert at least Rs200 billion to those schemes that would either be executed in the constituencies of PML-N legislators or would give political mileage to the ruling party in the coming elections." So they going to use these funds as bribes to win the next elections. After reading this the people who intend to vote of the PMLN should think twice. Their votes will for the country for some individuals who have personal interest to make money and save the money they got through their corruption, stashing in Swiss Banks and offshore companies.
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