The utilisation was even 11.6% lower than the comparative period of previous fiscal year, when the federal PSDP spending stood at Rs183.2 billion. PHOTO: FILE
The Rs162-billion utilisation of funds in the first half (July-December) of current fiscal year suggest that the Pakistan Tehreek-e-Insaf (PTI) government will not be able to fully utilise the Rs701-billion annual Public Sector Development Programme (PSDP).
Members of the National Assembly belonging to the PTI on Tuesday complained to Prime Minister Imran Khan for not undertaking development schemes in their constituencies, according to sources in the PTI.
They raised the issue during a parliamentary party meeting, held before the start of the National Assembly session. A PTI MNA from Attock district asked when development activities could be undertaken in Mianwali district - the home town of the premier, then why the work could not begin in other constituencies, according to the sources.
Other members also raised the issue of giving jobs and starting work in their constituencies. Sources said the PM was of the view that the assembly members were interested only in jobs and money, which triggered a response from the MNA from Attock district.
Science and Technology Minister Fawad Chaudhry opposed the idea of giving development funds to the parliamentarians. But he was reminded by a fellow member that Chaudhry got funds from the Punjab government for an irrigation project.
Development funds should be given to tehsils and districts instead of members of parliament, Chaudhry tweeted after the meeting. He said the key reason for not releasing funds at district levels was the absence of provincial finance awards.
In the current fiscal year, the PTI government has increased the discretionary spending budget of parliamentarians from Rs24 billion to Rs28 billion. Planning and Development Minister Asad Umar on Tuesday tweeted that the government had put greater focus on development spending and in December alone Rs75 billion had been utilised.
“Greater focus on development (was) resulting in acceleration of development spending and in December development expenditure under PSDP schemes was Rs75 billion,” said Umar.
In the previous five months, the expenditure was Rs87 billion and in one month “we nearly spent as much as in the last five months”, stated the minister.
The prime minister had appointed Umar as federal minister for planning in November in place of Makhdoom Khusro Bakhtiar.
However, the cumulative utilisation in July-December of the current fiscal year was only Rs162 billion or 23% of the annual budget of Rs701 billion. The utilisation was even 11.6% lower than the comparative period of previous fiscal year, when the federal PSDP spending stood at Rs183.2 billion, according to the Ministry of Finance’s fiscal operations summary.
By this trend, the PTI government is again set to miss the annual PSDP spending target of Rs701 billion - for the second consecutive year.
However, Umar said he planned to accelerate development spending in the remaining period of the fiscal year to ensure full utilisation of the budget. “Actual spending will increase once reconciliation for the month is completed,” he said.
In order to provide stimulus to enhance economic growth, the federal cabinet recently changed the strategy for the release of development funds.
Funds for PSDP expenditure for each project shall be released at the level of 20% in Q1, 30% each in the second and third quarters and 20% in the fourth quarter against the budget allocation for 2019-20, according to the revised PSDP fund release strategy approved by the federal cabinet.
According to the revised strategy, the releases should have been Rs350 billion in the July-December period while the actual releases as per the Ministry of Planning record stood at Rs301 billion. The releases fell short of the revised target by Rs50 billion or 14%. The State Bank of Pakistan said on Monday that the government would miss its annual economic growth target of 4%.
There is also criticism of the Ministry of Finance over slow utilisation of funds to meet the International Monetary Fund (IMF) fiscal deficit reduction targets. The revised budget strategy had minimised the role of the Ministry of Finance in the release of funds to only first three quarters of the fiscal year.
Despite a substantial rise in development expenditure in the first quarter, the federal PSDP expenditures were recorded at 13.3% of the overall annual budgeted PSDP, according to the SBP’s first quarterly report on the state of economy released on Monday.
In the first quarter, the releases for security enhancement amounted to 69% of the total releases and for merged areas’ 10-year development programme the ratio was 31%.
Published in The Express Tribune, January 8th, 2020.
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