Imperatives of development

Development budget has flexibility to ensure delivery, thus allowing ministries to have work-around of bans.

The Planning Commission has carried out an analysis of its ballooning project portfolio of Rs4.1 trillion. Around 22 per cent of this vast sum, roughly equal to the budgets of the federal and provincial governments, is meant for salaries, vehicles, miscellany and contingencies. In other words, delivering development is an extremely costly affair, especially when we know that the entire development spending is obtained from borrowed money. Borrowing at 15 per cent just to pay salaries can only add to the rising debt burden.

The development budget does require some flexibility to ensure delivery. Its discipline, therefore, is not as rigid and strict as that of the current budget. For instance, when fresh recruitment is banned due to financial stringency, development projects are exempted. Ministries looking for new staff get around the difficulty by preparing development projects for capacity-building, institutional strengthening and creation of new cells and units. These projects also have provisions for vehicles in numbers unthinkable in the current budget. The Planning Commission itself, which is supposed to approve, appraise and monitor projects of all ministries, has many such projects. Some fancy ones in the Public Sector Development Programme 2011-12 include: Institutional Strengthening and Efficiency Enhancement of the Planning Commission (Rs120 million) and Promoting Professional Excellence in the Planning Commission, Phase I (Rs346 million). The latter suggests there will be more phases! A never-ending development project since 1990 is the setting up of an Environment Section in the Planning Commission. As a sustainable solution, it should have moved to the current budget a long time ago. The Planning Commission also has a hefty share of miscellany. For 2011-12, Rs6 billion have been allocated for feasibility studies and ‘other requirements’. No details have been given. Ironically, the recent Memorandum of Understanding signed between the UNDP and the Planning Commission to implement the New Economic Growth Framework will also end up being a project — salaries, cars, consultants and all. Technical assistance from the Department for International Development, which had been a bone of contention between the Planning Commission and the ministry of finance, is likely to have similar deployment.

The ministry of finance, which has the overall responsibility to ensure the linkage between demands for development and the requirements of financing, has also piled up a large portfolio of its own projects, now numbering 73. The portfolio includes a Rs171 billion project called Institutional Strengthening of Finance Division. This self-indulgence of the Planning Commission and ministry of finance encourages even the ministries not known as development ministries to come up with all kinds of projects.

The Public Sector Development Programme is important for undertaking crucial infrastructure and social sector projects. The need is for improving the project mix, the quality of implementation and a linkage with outcomes. Hopefully, the diagnostic report by the Planning Commission is a step in this direction. The provinces where the major action now lies also need to carry out similar analysis of their project portfolios.



Published in The Express Tribune, July 22^nd, 2011.