Govt withdraws Rs250 million infrastructure grant

The federal government on Wednesday withdrew its decision to give a quarter of a billion rupees to a private foundation for an infrastructure project, which it had earlier allocated in a non-transparent manner while using the inflation-bitten taxpayers' money.

The government had allocated funds for The Noorani Foundation (TNF) without setting any criteria and despite the fact that social sector was not the responsibility of the centre under the constitution.

Last month, the Ministry of Finance sanctioned a grant of Rs250 million for The Noorani Foundation for the construction of a school building.

The funding was approved under grant number 45, which is meant for subsidies and miscellaneous expenditures of the federal government.

However, on Wednesday, the government decided to roll back the decision, saving Rs250 million of taxpayers.

"The government has reversed the decision to release money for The Noorani Foundation," Qumar Abbasi, spokesman for the Ministry of Finance, told The Express Tribune.

In order to accommodate the private party, the finance ministry created a new category in the budget and instructed the Accountant General of Pakistan Revenue (AGPR) to create a new vendor number in public accounts to facilitate the payment.

The finance ministry spokesman said that Rs250 million had been earmarked in the fiscal year 2024-25 budget for The Noorani Foundation for the construction of a boarding school in Swabi.

He stressed that the Public Finance Management Act, 2019 empowered the ministry to give the grant.

The federal government may approve grant-in-aid for individual, public or private institutes, local bodies and other non-political institutions and associations as it may consider appropriate in the manner as may be prescribed, said Qumar.

Responding to a question on whether the special treatment was given to other private organisations as well, the spokesman pointed out that the grant had also been extended to the Boy Scouts and Girl Guides Associations, Iqbal Academy of Pakistan, Al-Shifa Eye Trust Rawalpindi and Fatimid Foundation Karachi.

In the current fiscal year, the grant has been allocated for the Pakistan Foundation Fighting Blindness, Hassan Abdal Cadet College and Nazriya Pakistan Council Trust, said Qumar.

The spokesman added that Rs250 million had been set aside for the general public good to provide educational services in Swabi, a relatively less developed district.

All these allocations largely fall in the areas of health and education, a priority of the government in social sector spending.

However, under the constitution, the social sector is not the responsibility of the cash-starved federal government. Only provincial governments can provide such grants to the social sector.

The spokesman said that the Ministry of Finance had not yet released the budgetary allocation for The Noornai Foundation and the decision "has now been reversed".

Nonetheless, the finance ministry's earlier decision to set aside Rs250 million for a subject that is not its responsibility and for a private entity raises a question mark over the effective utilisation of taxpayers' money.

The salaried class is forced to pay up to 39% of its gross earnings in taxes.

Sources said that the Ministry of Finance did not determine any criteria for giving money to a privately run organisation. The money was allocated without getting approval of any federal government entity like the Central Development Working Party.

There are thousands of charitable organisations working in Pakistan but their trustees run them by seeking donations from rich private organisations and individuals. It is rare that taxpayers' money is given for a private infrastructure project.

TNF version

"Since fundraising in Khyber-Pakhtunkhwa was proving difficult, The Noorani Foundation requested the government for a one-time grant to construct the school," said Ali Ahmed, spokesperson for the foundation. He said that the government approved Rs250 million.

The cost of the school in Swabi is estimated at Rs600 million, as compared to a similar school in the government sector, eg, Danish of Rs5 billion, said Ahmed.

The spokesman added that the commitment of a significant portion of the remaining funds has been arranged from other donors and the construction of the school is expected to start shortly.

Ahmed said that the one-time government grant has not yet been received by the foundation.

He further said that the Rashid Mehmood Welfare Organisation after seeing the school in Faisalabad offered land to the foundation for a similar school in their socio-economic compound in Swabi.