Centre takes over Rs50b K-P funds

Diverts 20% funds towards lawmakers’ schemes to bypass provincial govt

ISLAMABAD:

In a bid to deny its political arch rival, Pakistan Tehreek-i-Insaaf (PTI), an opportunity to win voters using the centre’s money, the federal government has taken over control of the Rs50 billion budget meant for the merged districts of erstwhile FATA in Khyber Pakhtunkhwa (KP).

The government has already directed the Auditor General of Pakistan (AGP) to conduct a special audit of the funds that had been meant for the merged districts of FATA but are allegedly being spent in settled areas.

For the current fiscal year 2022-23, the federal government had allocated Rs50 billion for the merged districts of KP, including Rs30 billion under the 10-year erstwhile FATA Development Plan.

Now, however, the federal government has setup a steering committee, to be headed by the Deputy Chairman of the Planning Commission, who also happens to be Planning Minister Ahsan Iqbal, to take decisions about Rs40 billion, of the Rs50 billion funds.

The rest of the Rs10 billion will be spent on the pattern of the Sustainable Development Goals, which means that this money will not pass-through regular sanctioning channels.

The federal government has also decided to divert 20% of the funds from the erstwhile FATA Development Plan towards parliamentarians’ schemes to bypass the provincial government.

The development has come in the middle of heightened political uncertainty that will lead to more constituency-based expenditures in the coming weeks.

Sources told The Express Tribune that the cabinet had initially approved the diversion of 20% of the funds that had been earmarked to end inequalities in the districts that have been merged with KP

Earlier, the federal government was releasing these funds to the provincial government, which was spending it as per its own plans.

According to sources, the federal government took control of the Rs50 billion funds to bypass the PTI-led provincial government and to instead spend the funds on recommendations from politicians belonging to the coalition government. Some of these funds will now be spent on the lines of the Sustainable Development Goals – an acronym coined for parliamentarians’ schemes.

“The Rs50 billion had been given by the federal government and should be spent to create goodwill for the federal government,” said Iqbal, confirming the development.

The minister said that a steering committee, which will also have representation of the provincial government, will now decide how 80% of the funds will be allocated.

According to the planning minister, the projects will be approved by the Central Development Working Party against the erstwhile FATA allocations.

The move, however, may cause the provincial government serious fiscal trouble while it struggles to balance its budget. It will also spark further tensions between the Pakistan Muslim League-Nawaz (PML-N) and the PTI.

KP Finance Minister Taimur Saleem Jhagra could not be contacted for a comment.

“There were complaints against the KP government alleging that it was using the erstwhile FATA funds in the settled areas,” said Iqbal. He added that the federal government has asked the AGP to conduct a special audit of the funds.

About two months ago, the cabinet approved that 20% of the 10-year Plan for the merged districts funds should be channelled for “inclusive development on the procedure of the SDGs initiative to make it more transparent for the promotion of SDGs in these less developed areas,” showed the documents.

Last month, the planning minister approved releasing Rs1.5 billion in the first phase to be spent on the lines of the SDGs. The Ministry of Finance, however, has not yet sanctioned the money.

The government wants to handover Rs10 billion to the Ministry of Housing and Works, which in turn, will spend the money in areas to be recommended by the politicians belonging to the ruling alliance.

The details showed that of the Rs50 billion, only Rs5 billion could be spent in the merged districts during the first half of the current fiscal year; development spending has taken a big hit due to the prevailing economic conditions.

The planning ministry has already approached the prime minister’s office for an increase in the Rs727 billion worth Public Sector Development Programme (PSDP) spending to get more fiscal space ahead of the general elections. For the current fiscal year, the national assembly had approved Rs727 billion for PSDP but last month the finance ministry informed the International Monetary Fund (IMF) that the budget will be slashed by Rs258 billion to Rs469 billion. Details showed that during the July-December period, PSDP spending amounted to Rs151 billion – down by 54% or Rs176 billion when compared with the annual spending plan.

The government has already released the entire amount of Rs87 billion for parliamentarians’ schemes, camouflaged under SDGs. Actual spending in six months, however, remained at Rs13.3 billion.

Another Rs20.6 billion have been given against allocations meant for provincial and special areas. The housing ministry also spent Rs2.6 billion, mostly on projects of a political nature. The decision to release the full amount of Rs87 billion for parliamentarians’ schemes, however, has already started to impact the spending allocations for other projects adversely, as disclosed by the planning ministry in its summary.

Published in The Express Tribune, January 14^th, 2023.

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