Punjab fails to spend sufficient uplift funds

Approved development budget of Rs350 billion, but it remains largely unutilised

LAHORE: The government of Punjab failed to spend a sufficient amount of development funds in first six months of the current fiscal year and even health and education sectors, which were described as highly prioritised by the Pakistan Tehreek-e-Insaf (PTI) government, did not receive much attention.

For fiscal year 2019-20, the provincial government, led by the PTI, had approved a development budget of Rs350 billion but it remained largely unutilised. In the previous year, the province allocated Rs238 billion for development projects. In 2017-18, the then provincial government, headed by the Pakistan Muslim League-Nawaz (PML-N), approved Rs635 billion for the Annual Development Plan (ADP).

However, the development funds have remained underutilised in the past and it seems that the pace of development will remain sluggish in the current fiscal year as well. The pace at which funds are released for different projects has been lethargic and apart from the Orange Line Metro Train project, no other project has managed to utilise 100% of the released funds.

According to official statistics, in the first six months (Jul-Dec) of current fiscal year 2019-20, Rs818 million was released for the metro train project out of the total allocation of Rs8.8 billion for the entire fiscal year.

All the released funds were utilised primarily in the wake of high court pressure to get the Orange Line Metro Train project on track.

Total funds for the project, according to government’s statistics, stand at Rs165.23 billion and by the end of June 2019, Rs141.58 billion had been spent on the foreign-funded project. Apart from this, not a penny was spent on any other scheme of the provincial transport sector.

A total of 23 foreign-funded projects are being undertaken by the Punjab government in the current fiscal year. Cumulative cost of these schemes is estimated at Rs509 billion. In first six months of the current fiscal year, allocations worth Rs33.6 billion were approved whereas only Rs3.026 billion was released for these projects.

Of the released amount, Rs2.533 billion was actually utilised on these projects while the rest remained unutilised. Apart from the metro train project, only three foreign-funded projects were able to get funds. These were Southern Punjab Poverty Alleviation Project with allocation of Rs194 million and utilisation of Rs82 million, Skill Development Programme with allocation of Rs9.39 billion and utilisation of Rs902 million and Rehabilitation of Jalalpur Irrigation and its System, which managed to get Rs1.08 billion with utilisation of Rs731 million.

The remaining 19 foreign-funded schemes were stuck in the pipeline because of non-allocation of funds in first six months of the current fiscal year. Most of these schemes were meant to be completed in previous years, however, they were carried forward by the past governments and left to be developed by the new administration.

In total, the Punjab government planned to initiate and continue work on 5,321 development schemes. Of these, 4,286 were ongoing schemes and 943 were new. Around 71 schemes were planned to be developed on public-private partnership (PPP) mode and Rs42 billion or 12% of the total ADP was allocated to these schemes.

Out of the total of 5,321 schemes, it is anticipated that only 2,495 schemes are likely to be completed by the end of current fiscal year in June 2020.

On the other hand, out of the 943 new schemes, the provincial government has so far been able to approve 232 schemes while the rest are awaiting approval.

Highly prioritised areas of the government are also facing hurdles as the release of funds has been delayed. Some 310 approved schemes for schools, higher and special education were able to get only Rs4.29 billion in the first six months of FY20 out of the total allocation of Rs40 billion.

For specialised healthcare and medical education, not a single rupee was utilised despite release of Rs4 billion.

Similarly, only Rs1.01 billion was utilised by the provincial government on 159 approved schemes in the area of primary and secondary healthcare. For FY20, Rs23.5 billion had been allocated for these schemes whereas only Rs9.8 billion was actually released.

When contacted, Adviser to Punjab Chief Minister Dr Salman Shah did not comment on the slow pace of work on development schemes in the province.

Economist Dr Qais Aslam told The Express Tribune that ideally the government should release development funds after every quarter but unfortunately in Pakistan parliamentarians followed instructions from their leaders instead of listening to the demand of voters.

“These allocations are made only to please the public, whereas in reality, no government has been able to utilise the entire development budget,” Aslam said.

“I am sure this government too will release funds three months prior to the start of the new fiscal year,” he added. “The federal government claimed back a specific level of development funds from provinces to satisfy the International Monetary Fund, which is not a new practice because previous governments also did this, which is unfair for the masses.”

Published in The Express Tribune, January 17^th, 2020.

Like Business on Facebook, follow @TribuneBiz on Twitter to stay informed and join in the conversation.