Rs24b from CPEC funds goes to MNAs’ schemes

Published: April 21, 2019


ISLAMABAD: The federal government has handed over Rs24 billion from the funds reserved for the China-Pakistan Economic Corridor (CPEC) and other initiatives to the Cabinet Division for onwards discretionary spending on parliamentarians’ schemes.

It took the planning, development and reform ministry two months to run through the process and address the objections raised by government departments before signing off the Rs24 billion cheque in favour of the Cabinet Division.

The release of funds for parliamentarians’ schemes belies the principles of prudent fiscal discipline and goes against Prime Minister Imran Khan’s promise to protect taxpayers’ money.

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The latest status of the release of Public Sector Development Programme (PSDP) funds up till April 19 shows that an amount of Rs24 billion has been sanctioned against the total allocation of Rs27 billion.

On February 19, the planning and development ministry had surrendered Rs24 billion from its demand number 137 (CPEC and other initiatives) for the current fiscal year. The money was surrendered in favour of the Cabinet Division for a scheme titled “Sustainable Development Goals Achievement Programme”.

The PTI government has set up a steering committee, headed by Special Assistant to the PM on Political Affairs Naeemul Haq, to disburse funds for the development schemes recommended by MNAs for their respective constituencies.

Giving away public funds by using his discretionary powers is among many U-turns that Prime Minister Imran Khan has taken after coming into power.

The discretionary spending is also in violation of the Supreme Court’s verdict in a case involving former prime minister Raja Pervez Ashraf.

The amount of Rs24 billion, diverted from grant number 137 (CPEC and other initiatives), has been moved to the Cabinet Division’s grant number 108, which already has an allocation of Rs5 billion.

With the additional Rs24 billion, the total spending on parliamentarians’ schemes this year would be Rs29 billion.

The planning and development ministry had issued an adjustment order in the PSDP 2018-19 on January 16, just a day after the Cabinet Division requested for the money.

The total amount sanctioned for development has increased to Rs525.8 billion after the release of the Rs24 billion. However, the finance ministry is not fully honouring all these authorisations.

About half of the total budgetary releases have been given to the National Highway Authority (NHA) and the Water Resources Division, according to the planning and development ministry. The NHA alone has been given a lion’s share of Rs208.8 billion or 40% of the total releases as of this week.

Owing to the higher releases to the NHA, the foreign aid component of the PSDP has disproportionately increased. Against the annual foreign aid allocation of Rs144.3 billion, the component shot up to Rs174.6 billion. Of the Rs174.6 billion, an amount of Rs133.2 billion has been given to the NHA alone.

The share of foreign financing in development projects is 33.2% but it has historically remained at one-fifth of the total releases.

This will force the government to cut the rupee component of the PSDP from the approved level of Rs530 billion.

The annual development budget, which has been revised downwards for the current fiscal year, is Rs675 billion. The releases so far are equal to 77.7% of the development budget.

As of this week, Rs210 billion were given to all federal ministries for development spending. The maximum amount — Rs53.3 billion — was given to the water resources ministry.

The States and Frontier Regions Division and the Higher Education Commission received Rs25.6 billion and Rs18.5 billion respectively.

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A sum of Rs26.1 billion was handed over to the Pakistan Atomic Energy Commission. The National Transmission and Despatch Company received Rs11 billion.

The planning ministry released Rs24.1 billion and Rs13.5 billion for the Azad Kashmir and Gilgit-Baltistan governments respectively.

The government gave Rs11.9 billion to the military for increasing security and Rs18.3 billion for temporarily displaced persons.

The releases for the Gas Infrastructure Development Cess Fund remained zero as was the case during the Pakistan Muslim League-Nawaz’s tenure.

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