Funds for 72 projects slashed

The government has slashed the budget of 72 schemes, which mainly belong to the health, education and communication sectors, to provide funds for four dozen new projects included in the Public Sector Development Programme (PSDP) on the recommendation of its coalition partners.

Official documents showed that the Ministry of Planning had cut the allocation of Rs22.8 billion for 72 projects which included Gwadar Safe City project, the scheme for rehabilitation of the people residing along the Line of Control (LoC) and the Special Development Initiatives for the Backward Districts of Pakistan.

A reduction of Rs200 million out of the allocation of Rs300 million for rehabilitating the people affected by the heavy shelling from Indian forces shows the apathy of the government towards these people.

Earlier, the government had planned to complete the Gwadar Safe City project in the current fiscal year by providing the remaining financing of Rs688 million. However, the documents showed that the government had cut the funds for the Safe City project by Rs300 million, leaving the people vulnerable to security threats for yet another year.

Seventy-two schemes faced the axe due to the decision to include 47 new schemes in the PSDP after the approval of budget by the National Assembly, which had been recommended by the government’s coalition partners. It emerged that many of the schemes affected by the government’s political priorities were critical in nature and had already been facing funding constraints. Most of those projects were located in Balochistan while the allocation for the hospital schemes of Gilgit-Baltistan was also slashed, thus delaying their completion for years.

The National Economic Council (NEC) – the constitutional body meant to approve the country’s macroeconomic plan – has endorsed the reduction in funding for the 72 schemes and the inclusion of 47 more in the PSDP. The Express Tribune reported last month that the government had secured the approval of a majority of NEC members through the circulation of a summary in August to divert funds.

The approval of 47 schemes could not be secured at the time of printing the PSDP Book 2022-23. The Ministry of Finance has also not included these 47 schemes in the demand-for-grants Budget Book 2022-23.

After the NEC’s nod, the planning ministry has started releasing funds for the new schemes and approval of technical supplementary grants has also been taken. Out of the allocation of Rs23 billion, Rs1.2 billion has been taken from the annual budget of National Highway Authority, Rs8.7 billion from the provinces and special areas and Rs1.5 billion from the allocation for the Ministry of Housing and Works, according to the documents.

Additionally, Rs5 billion has been curtailed from the allocation for the planning ministry that was earlier meant for innovation support projects. However, now they face a reduction of Rs3 billion while the allocation for the special development of backward areas has been slashed by Rs2 billion.

Furthermore, Rs200 million has been cut from the allocation for a project designed to accelerate the response to diseases like HIV/AIDs and malaria. The budget for the Rawat-Faizabad metro bus project has been cut by 100%, or Rs1 billion.

Besides, the allocation for the National Heritage and Culture Division project has been reduced by Rs350 million by completely withdrawing funds for the construction of Pakistan Academy of Letter, National Centre for Performing Arts, establishment of provincial art centres and National Library Complex. The allocation for three water-sector schemes – Garuk Storage Dam, Kharan district and Kachhi Canal projects – has been cumulatively reduced by Rs2.2 billion, according to the documents.

Similarly, the allocation for three power schemes – construction of grid stations in Puran, Khuzdar and Panjgoor – has been slashed by 100% to divert Rs450 million for the politically motivated schemes.

Other projects including a girls school in Quetta and road schemes in Karachi and Gujranwala have also taken a hit to pave the way for funding the schemes that had not been included in the national development plan.

Earlier, the government had earmarked Rs100 million for the Islamabad Zoo project, which has now been completely withdrawn. A sum of Rs2 billion has been diverted out of the allocation of Rs70 billion for the parliamentarian schemes.

The decision has been made despite the finance ministry’s assurances to the IMF that it will save Rs150 billion against the already low allocation of Rs727 billion for the PSDP 2022-23.

Moreover, the planning ministry has also started diverting money from the ongoing projects to finance some of the reconstruction activities in the flood-hit areas. Due to the scarcity of resources, the finance ministry has already capped spending to just one-tenth, or Rs73 billion, for the July-September quarter of current fiscal year.

Published in The Express Tribune, October 4^th, 2022.

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