The PML-N government, for the second consecutive year, has slashed pro-poor spending under the Benazir Income Support Programme and spent Rs91.8 billion by close of the fiscal year, depriving around 300,000 families from the promised monthly cash stipends.
It also could not live up to its promise of giving Rs1,500 monthly cash stipend to as many as 5.3 million eligible families, as the actual number of beneficiaries remained at 5 million.
As of June 30, the last day of fiscal year 2015, spending under BISP stood at Rs91.7 billion. This amount includes bank charges and administrative expenses on running the programme, according to documents of the BISP Secretariat. The actual unconditional cash transfers to the poorest of the poor stood at Rs86.8 billion.
The overall spending fell short of the budgetary allocation by Rs5.4 billion or 5%. However, this time the cut was less than the previous fiscal year. In its first year that coincided with fiscal year 2013-14, the PML-N government had released 10% less than the budgetary allocations to the BISP.
For fiscal year 2014-15, the government had allocated Rs97.2 billion for BISP.
Missing all its targets
Under the $6.6-billion bailout programme, the government is bound to increase pro-poor spending, as the Washington-based lending agency emphasises on targeted cash grants and power subsidies over untargeted expenses.
A 5% cut on BISP spending has also led to missing the indicative target on pro-poor spending that the IMF fixed for fiscal year 2014-15 - it had set the BISP spending target at Rs95 billion.
While delivering his second budget speech in June last year, Finance Minister Ishaq Dar had stated that, “next year (2014-15) we will be increasing the number of beneficiary families to 5.3 million”. However, the number stood at 5 million.
The 5.3 million beneficiaries was never BISP’s target, said Shabbir Ahmed, Secretary BISP while talking to The Express Tribune. He maintained that the BISP spending was on target when compared with the five-million-beneficiaries goal.
The secretary said that Rs1.5 billion disbursements were withdrawn from thousands of bank accounts that became dormant, as the accountholders were not operating these accounts for more than two years. Ahmed said the BISP also cancelled many duplicate Benazir debit cards, which became another reason for the less-than-Rs97.2-billion spending.
BISP’s external costs
According to BISP documents, out of the Rs91.8 billion that the government spent in fiscal year 2014-15 an amount of Rs2.6 billion were services charges that commercial banks claimed for disbursing the money.
The BISP’s administrative expenses stood at Rs1.9 billion or 2% of the total spending. Out of that, Rs1.3 billion was the cost of salaries.
For the new fiscal year, the government has enhanced allocation to Rs102 billion and reset the beneficiaries goal at 5.3 million people, according to Dar’s budget speech.
The chairperson of the BISP, Marvi Memon, has convened a special board meeting for Friday to review the BISP performance in the outgoing fiscal year and approve the budgetary targets for the new fiscal.
According to the documents, the board is going to approve Rs102 billion total spending for BISP. The unconditional cash transfer target is proposed at Rs93.8 billion, up from Rs86.8 billion from last year. The BISP Secretariat plans to enhance spending under Waseela-taleem programme from Rs533.2 million of outgoing fiscal year to Rs2.8 billion.
The bank disbursement charges have been estimated at Rs2.8 billion while the BISP’s own expenses have been estimated at Rs2.4 billon - up by Rs453 million or 24% over the previous year.
Published in The Express Tribune, July 1st, 2015.
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