Last four years: Only 4% foreign funding put to use for development

CGPA report indicates 93% of K-P’s budget still reliant on federal transfers

PESHAWAR: Governments have had a long-standing romance with foreign funding when it comes to development projects. Yet, even as foreign project assistance (FPA) accounts for a chunky 25% of Khyber-Pakhtunkhwa’s Annual Development Programme, its utilisation in terms of investment has not crossed 4% in the last four fiscal years.

A newly-released Centre for Governance and Public Accountability (CGPA) budgetary analysis report extrapolated the aforementioned and other ADP statistics. The report’s launch ceremony was attended on Friday by Right to Information Commissioner Professor Kalimullah, MPAs Meraj Humayun, Sardar Hussain Babak and Fazal Elahi, finance director Saif Usmani and others.

Several reasons were identified for the inflation of the ADP’s foreign component over the years. It would appear that the politics of image-building underpins the process. Low utilisation, however, is grounded in numerous complexities in the procedure.

In the ongoing fiscal year, FPA utilisation has been 14% so far but actual figures will only be available by the end of June. Over the past four years, the foreign component in K-P’s ADP has seen a steady increase. Budgetary expenditures comprise current and development allocations. While running costs increase over the stretch of the fiscal year, the axe ultimately falls on the development kitty.



Slow trickledown

The CGPA analysis showed that after the 18th Amendment, 40 out of 47 departments were devolved to the province. However, the process has seen three phases, forcing the K-P government to continue relying heavily on the Centre for its budget.

An estimated 93% of K-P’s annual budget comprises largely on federal transfers while only 7% is generated through its own revenue.

Sources of funding

Major components of the provincial budget are federal tax assignments (commissioned under the 7th National Finance Commission Award), straight transfers, and net hydel profits. Additionally, the province is handed a 1% war on terror grant by the federal government (which is expected to be slashed this year).

Almost three of the aforementioned sources have been a long-standing bone of contention between the Centre and K-P.

Concentration of resources

The report also provides an analysis of Charsadda, Nowshera, Mardan, Swabi and Peshawar – chosen for their political significance. Its findings show an oscillation in development spending in the districts between 2009 and 2015.

During the discussion, almost all participants agreed pre-budget consultation sessions should be conducted with all stakeholders on board.

Speaking on the occasion, CGPA Executive Director Anwar Jamal said the government should make all budget details public. “Data should be released after the execution of each year’s budget. It affects everyone and is not a confidential document,” he said.

Published in The Express Tribune, June 13^th, 2015.