PSDP allocation: Two provinces reject centre’s diktat on use of uplift funds

Khyber-Pakhtunkhwa, Balochistan demand more share, meeting ends inconclusively.

ISLAMABAD:

The federal government has faced stiff opposition from the provinces, for the second time in two weeks, when Khyber Pakhtunkhwa and Balochistan governments refused to accept the dictation of the centre on the issue of allocation of funds for development projects in their provinces.

A meeting of the committee constituted to review this year’s federal-funded Public Sector Development Programme (PSDP) remained inconclusive here on Thursday when provinces refused to accept the recommendations of the federal government, according to officials.

The meeting was chaired by Federal Minister for Planning and Development Ahsan Iqbal and attended by chief ministers of Sindh, Balochistan, Gilgit Baltistan and Prime Minister of Azad Jammu and Kashmir. The chief ministers of Punjab and Sindh did not come to attend the meeting.

Mandate of the committee was to reallocate PSDP grants in their respective provinces based on priority given by the provincial governments.

Provinces want more funds

The provinces asked the federal government to allocate more funds for their projects. However, the committee chairman did not accept this demand, the officials said. The provincial governments refused to accept the federal government’s plea of reprioritising the funds within sectoral allocations. The provinces wanted to reprioritise the allocations across the sectors according to their own priorities, they added.

It is the second time when the federal and provincial governments differed on policy matters. Earlier, the provinces turned down a federal government proposal of appointing federal adjustor to deduct electricity bills from federal transfers to provinces aimed at avoiding recurrence of inter-corporate debt in the energy sector.

Ministry claims review complete

However, an official statement by the Ministry of Planning claimed that the PSDP review has been completed in consultation with provincial governments so as to incorporate their preferences.

On June 10, while chairing a meeting of the National Economic Council (NEC), Prime Minister Nawaz Sharif had constituted the committee for the review of the PSDP. He had directed to review the Rs3 trillion development programme for the fiscal year 2013-14 and come up with recommendations by July 31.

However, the deadline was missed after the bureaucrats of the planning ministry could not timely initiate the review exercise. The need for the review arose after the provincial governments noted that there were dozens of schemes in the programme added by the planning ministry that were not in line with their priorities. Another objection raised was the inclusion of the previous PPP government’s schemes in PSDP.

The NEC also ordered the committee to streamline the process of release of funds to the provinces, as Sindh and Khyber Pakhtunkhwa had complained to the NEC that they were not consulted before finalising the new PSDP.

Due to delay in completing the review, work on development projects was facing delays. The planning ministry released only Rs14.5 billion in the first month of the new fiscal year due to the same reason.

Ahsan Iqbal told the participants that the priority of present government was completion of ongoing projects so that they might not linger on. He opposed the provinces’ demand to include new projects in PSDP till the previous projects are completed.

Published in The Express Tribune, August 16^th, 2013.