The overall utilisation of the Annual Development Programme (ADP) funds during the last five years in the Punjab was 68 per cent of the allocations in budgets.
A senior Planning and Development Board official said on Friday ADP utilisation of 85 per cent was considered ‘good.’ He said low utilisation spoke of poor governance.
In this case, he said, the utilisation was low essentially because the ADP was not based on a rational analysis and the factual financial position. He said ADP size had been bloated by claims and statements made for political reasons.
He said during its previous term, the Pakistan Muslim League-Nawaz government had introduced a below-the-line ADP mechanism. The utilisation of funds for these projects had been high as they represented chief minister’s special initiatives.
The provincial government had continued to enhance the total outlay during each financial year. It was Rs165.3 billion in 2008-2009 and has been set around Rs290 billion for the 2013-14 budget. The official said more efficient utilisation of ADP was not possible as the executing agencies “lacked” the capacity to spend the funds within the year.
The government had announced a Rs165.3 billion ADP for its first financial year, 2008-09.
It had later enhanced the total allocations to Rs173.5 billion through excess and surrender statements to provide more funds for infrastructure and development strengthen the social sector. In the end, the utilisation had remained at Rs146.8 billion – 88 per cent of original allocation.
In 2009-10, the provincial government allocated Rs188.3 billion for the ADP (Rs23 billion increase over the previous year.)
Owing to poor revenue collection it was revised to Rs150 billion in May 2010. At Rs134.1 billion, the utilisation was 71 per cent of the originally allocated funds for the development projects.
The government promised Rs193.5 billion for the ADP for financial year 2010-11. The allocation was later increased to Rs196 billion.
The core volume of ADP was Rs182 billion whereas Rs3 billion had been provided for Danish School System, Rs2 billion for TEVTA and Rs6.5 billion for Punjab Millennium Development Goals Programme. Social sector had a large allocation (Rs65.046 billion).
Owing to poor federal transfers, the ADP funds were cut down by Rs57.3 billion. However, the spending was Rs114.7 billion – 58 per cent of the outlay.
In May 2011, the provincial government presented a Rs220 billion ADP for the year 2011-12, a 14 per cent increase over the previous year.
Although tax and non-tax revenue from provincial resources increased by 20 per cent and 6 per cent respectively but the receipts from the federal divisible pool were less than anticipated. The ADP was then revised to Rs165 billion. The utilisation was reported to be Rs157 billion which was 71 per cent of the original outlay.
The government presented its biggest ever ADP of Rs250 billion for financial year 2012-13.
The core volume of ADP was calculated to be Rs210 billion. The remaining Rs40 billion had been earmarked for 15 special initiatives.
During the year, the government revised the ADP to Rs166.8 billion through excess and surrender statements. The utilisation was reported to be Rs121.2 billion till end of May and was expected to be Rs137 billion till June 30.
An official of the Finance Department said the utilisation of ADP remained less owing to multiple factors including a shortfall of Rs374 billion in FBR collections. He said resultantly the provincial government received Rs80 billion less from the divisible pool. The government then had to revise the ADP due to this financial crunch.
Finance Secretary Tariq Bajwa told a post-budget briefing the low utilisation of ADP this year was because of the general elections.
The low utilisation was not acceptable to the chief executive of the province, he said.
A senior official of Communications and Works Department (the biggest executing agency) said during the first quarter of the financial year practically no funds were released. For efficient utilisation, funds should be released immediately, he said.
Another official of Planning and Development Board said the ADP figure was always based on projected financial situation. It had become a fashion to raise the volume of the ADP every year without regard to the rate of utilisation during the previous year, he said.
Published in The Express Tribune, June 23rd, 2013.