Development budget: Government breaches limit on release of funds
Money disbursed apparently on political grounds, strategic projects miss out.
ISLAMABAD:
The Planning Commission has so far released 41% of its annual development budget, resulting in breach of maximum limit set for disbursement of funds in the first half of a fiscal year and has also flouted rules while accommodating projects of Larkana, Multan and Gujar Khan.
Owing to uneven releases apparently under political pressure, many strategic and healthcare projects either remained under-funded or in some cases no funds were provided at all.
The PC has released Rs95.3 billion from July to November this year, according to official documents. The amount is precisely 40.9% of the Commission’s original component of Rs233 billion.
For the current fiscal year, the federal government has allocated Rs360 billion for the development budget. Of that, Rs27 billion is at the disposal of the prime minister and Cabinet Division and the remaining Rs100 billion is the foreign aid component, which is with the Economic Affairs Division.
The PC has already breached the first-half limit by over Rs2 billion while one month is still to go. According to the ways and means limits, imposed by the finance ministry to ensure fiscal discipline, the PC cannot release more than 20% of funds in each of the first two quarters of a fiscal year. For the last two quarters, the limit is 30% each.
PC sources said the Commission was under pressure to release more than the allocated funds. They added Minister of State for Water and Power Tasneem Qureshi was pressurising the PC to give an additional Rs100 million for his project. He has already consumed his total annual allocation. Qureshi’s case is pending with Finance Minister Dr Abdul Hafeez Shaikh for a decision.
For the current fiscal year 2012-13, the government has estimated the gap between its income and expenditure at Rs1.2 trillion or 4.7% of gross domestic product. A recent report by the International Monetary Fund (IMF) has indicated that the gap will be Rs1.5 trillion or 6.4% of GDP. Increasing expenditure ahead of general elections next year may also take the development spending beyond the ceiling of Rs360 billion.
The PC could not restrict release of funds in the case of projects of interest to the top men of the country. It has released entire annual allocations of Rs350 million for a bridge over Indus River in Larkana, Rs70 million for rehabilitation of Larkana-Kambar Road, Rs100 million for Shaheed Benazir Bhutto Mother and Child Healthcare Centre Nawabshah, Rs300 million for Multan Inner Road Ring project and entire allocations were also released for two road projects of Gujar Khan.
Similarly, the PC has also released entire sums for its own projects. The Commission released Rs101.4 million for the PPMI Complex Islamabad. The sources said there were reports of embezzlement in the project as the building was not constructed as per design.
Responding to queries of The Express Tribune, a PC spokesperson defended the breach of limit. The government wanted to complete over 180 projects in the current fiscal year, half of those before December, said the spokesperson. “If we abide by the finance ministry’s formula, we will not be able to complete the task on time,” he added.
Because of uneven releases, no money has been disbursed for projects under the Prime Minister’s programme for prevention of Hepatitis, national programme for prevention of blindness, enhanced HIV/AIDS programme, malaria and tuberculosis control programmes. Total annual allocation for these half a dozen projects is Rs2 billion.
Similarly, the human rights ministry got only 2.4% of the annual allocation and both, Pakistan Atomic Energy Commission and Narcotics Control Divisions got roughly 18% of their annual budget. Some of the projects of the water and power sector were also under-funded.
Published in The Express Tribune, December 2nd, 2012.
The Planning Commission has so far released 41% of its annual development budget, resulting in breach of maximum limit set for disbursement of funds in the first half of a fiscal year and has also flouted rules while accommodating projects of Larkana, Multan and Gujar Khan.
Owing to uneven releases apparently under political pressure, many strategic and healthcare projects either remained under-funded or in some cases no funds were provided at all.
The PC has released Rs95.3 billion from July to November this year, according to official documents. The amount is precisely 40.9% of the Commission’s original component of Rs233 billion.
For the current fiscal year, the federal government has allocated Rs360 billion for the development budget. Of that, Rs27 billion is at the disposal of the prime minister and Cabinet Division and the remaining Rs100 billion is the foreign aid component, which is with the Economic Affairs Division.
The PC has already breached the first-half limit by over Rs2 billion while one month is still to go. According to the ways and means limits, imposed by the finance ministry to ensure fiscal discipline, the PC cannot release more than 20% of funds in each of the first two quarters of a fiscal year. For the last two quarters, the limit is 30% each.
PC sources said the Commission was under pressure to release more than the allocated funds. They added Minister of State for Water and Power Tasneem Qureshi was pressurising the PC to give an additional Rs100 million for his project. He has already consumed his total annual allocation. Qureshi’s case is pending with Finance Minister Dr Abdul Hafeez Shaikh for a decision.
For the current fiscal year 2012-13, the government has estimated the gap between its income and expenditure at Rs1.2 trillion or 4.7% of gross domestic product. A recent report by the International Monetary Fund (IMF) has indicated that the gap will be Rs1.5 trillion or 6.4% of GDP. Increasing expenditure ahead of general elections next year may also take the development spending beyond the ceiling of Rs360 billion.
The PC could not restrict release of funds in the case of projects of interest to the top men of the country. It has released entire annual allocations of Rs350 million for a bridge over Indus River in Larkana, Rs70 million for rehabilitation of Larkana-Kambar Road, Rs100 million for Shaheed Benazir Bhutto Mother and Child Healthcare Centre Nawabshah, Rs300 million for Multan Inner Road Ring project and entire allocations were also released for two road projects of Gujar Khan.
Similarly, the PC has also released entire sums for its own projects. The Commission released Rs101.4 million for the PPMI Complex Islamabad. The sources said there were reports of embezzlement in the project as the building was not constructed as per design.
Responding to queries of The Express Tribune, a PC spokesperson defended the breach of limit. The government wanted to complete over 180 projects in the current fiscal year, half of those before December, said the spokesperson. “If we abide by the finance ministry’s formula, we will not be able to complete the task on time,” he added.
Because of uneven releases, no money has been disbursed for projects under the Prime Minister’s programme for prevention of Hepatitis, national programme for prevention of blindness, enhanced HIV/AIDS programme, malaria and tuberculosis control programmes. Total annual allocation for these half a dozen projects is Rs2 billion.
Similarly, the human rights ministry got only 2.4% of the annual allocation and both, Pakistan Atomic Energy Commission and Narcotics Control Divisions got roughly 18% of their annual budget. Some of the projects of the water and power sector were also under-funded.
Published in The Express Tribune, December 2nd, 2012.