The Special Investment Facilitation Council has approved a proposal to drop 76 provincial projects worth Rs121 billion and to freeze further spending on the parliamentarians’ schemes and prime minister’s initiatives, bringing in line the federal spending with constitutional obligations.
The SIFC’s decision will save Rs149 billion of the federal government during the current fiscal year –in a move that is important to correct the past wrong priorities of the federal government. However, despite the decision, the federal government would still be spending on 247 provincial nature projects and it would need another nearly Rs800 billion in the coming years to complete the work on these schemes.
There are a total of 323 provincial projects having a total cost of Rs912 billion that are part of the federal Public Sector Development Programme (PSDP) 2023-24. The original idea was to transfer all these projects to the provinces, but the provincial governments refused to take this burden.
Due to these limitations, only 76 projects worth Rs121 billion will be dropped, subject to the final approval of a constitutional body.
The planning ministry, the custodian of the PSDP, proposed to the SIFC last week that only those provincial projects having zero spending on them should be dropped from the PSDP 2023-24. At this stage, there are 76 projects falling in the provincial domain having a total worth of Rs121 billion that will now be transferred to the provinces.
The SIFC also decided that no further funding would be given to the parliamentarians’ schemes, known as Sustainable Development Programme (SDGs). This will save another Rs28 billion in this fiscal year. Similarly, spending on six schemes under prime minister’s initiative has also been frozen for this fiscal year, saving Rs55 billion more.
It was decided that a summary now will be presented before the National Economic Council (NEC) – the highest constitutional body on economic and development affairs – for its final approval.
During the SIFC meeting, one member proposed that the provincial projects where about 5% spending of the total cost has already been incurred should also be transferred to the provinces. However, the planning ministry is not ready to take any responsibility for closing the projects where public money has already been spent. The SIFC’s suggestion would also be passed on to the NEC, according to the ministry officials.
At the time of the budget, the Pakistan Democratic Movement (PDM) allies fought tooth and nail to have their projects included in PSDP. A recent report by the International Monetary Fund revealed that Pakistan’s Rs12 trillion PSDP has become unviable due to lack of funding. The Rs12 trillion is the amount that is needed to complete all the ongoing projects.
Read SIFC to attract billions in investment: PM
The SIFC also decided that the provincial projects with 80% plus financial progress completed during the current fiscal year should also be given priority and be completed within this fiscal year. At present, 20 provincial projects, having a total value of Rs102 billion, are part of PSDP. The government needs another Rs13 billion to complete work on them. The SIFC decided that from the next fiscal year, no further funding from the federal PSDP will be given for these projects.
However, respective provinces may continue and complete the remaining projects.
The SIFC allowed that 38 projects worth Rs81 billion going on in the least developed districts with federal financing should be completed. The government needs another Rs65 billion to complete work on these projects.
Similarly, the SIFC decided that the remaining Rs28 billion should not be released for the parliamentarians’ schemes. The PDM government had allocated Rs90 billion for the parliamentarians’ schemes for this fiscal year and before leaving office it had released Rs61 billion for spending.
But the finance ministry had slowed down the spending on parliamentarians’ schemes, which it lately allowed. The spending on parliamentarians’ schemes stood at Rs35.5 billion by this week – up from Rs27 billion a few weeks ago. The SIFC decided that the provinces may continue with prioritisation, execution, and completion of the parliamentarians’ projects if deemed appropriate, including their liabilities.
The spending on parliamentarians’ schemes is non-transparent and often leads to wastage due to slippages and allegations of corrupt practices.
It was also decided that the Rs54 billion of the remaining PM’s initiatives would not be released in this fiscal year. Former Prime Minister Shehbaz Sharif had approved Rs80 billion for PM’s schemes.
The SIFC authorised the planning ministry to continue spending on the projects approved for 20 least developed districts of Pakistan. The total cost of these projects is Rs40 billion and so far no money has been spent. For this fiscal year, Rs6.8 billion has been allocated for them.
The planning ministry was authorised to fund only those schemes with a national development perspective.
Overall, against the annual PSDP size of Rs900 billion, the federal government has so far spent only Rs145 billion during the first half of this fiscal year.
Published in The Express Tribune, January 12th, 2024.
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