World Bank report: Govt slices budget for water, social sectors to accommodate PM Youth Package, TDPs

Security measures take priority, many medium-sized projects initiated during PPP tenure wound up

ISLAMABAD: Despite an urgent need to prevent a looming water crisis in the country, budgetary allocations for water and social sectors have been reduced to make room for ‘Prime Minister’s Youth Package’, Temporarily Displaced Persons (TDP) and security enhancement programme, said a World Bank report.

The government has adjusted the Rs100-billion TDPs and security enhancement programme along with the Rs20-billion PM package into the current fiscal year’s Public Sector Development Programme (PSDP) instead of allocating funds from the current budget.



Except infrastructure, allocations for the rest of the categories’ have been decreased to make space for TDPs and PM Youth Package that have only been added to the development portfolio during the last fiscal year, according to the ‘Pakistan Development Update’ report the World Bank released on Wednesday.

Infrastructure is set to receive the highest allocation of 55% of the total PSDP, with a budget of Rs386 billion.



After infrastructure, the TDPs and PM packages, which are dubbed as the new programmes, will get the second highest allocation of Rs120 billion or 17% share of the PSDP. These two sectors will comprise almost three-fourths of the total federal development budget of Rs700 billion.

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The government has not only diverted funds to new schemes but has quietly wound up many small and medium-sized development projects initiated during the PPP tenure, according to sources in the Planning Ministry.

This has not only left very little for other areas but has also increased the cost of on-going schemes due to delay in completion.

Budget sliced and diced

In the current fiscal year, the water sector’s allocation has been halved to just 4.3% of the total budget or Rs30.4 billion. The sector got Rs46 billion or 8.3% of the last fiscal year’s development budget.



None other than the Federal Planning and Development Minister Ahsan Iqbal had warned about the looming water crisis in the country but even he has not been able to allocate the requisite funds to the sector.

The Railways share in total PSDP has also been reduced to 5.9% of the total budget or Rs41 billion against last fiscal year’s allocation of 7.5%.

The social sector is another area where the allocation has been reduced from one-tenth of the total budget to just 6.2%, according to the World Bank. Allocations were also reduced in absolute terms. Against Rs58 billion given to the social sector in the last fiscal year, it will now get Rs43.6 billion.



Despite the 18th Amendment under which the Centre devolved social subjects largely to the provinces, the federal government retained many responsibilities besides funding higher education and curriculum development.

The share of Higher Education Commission, which is a federal subject, has been reduced from 3.8% of the total budget to 2.9% and the sector will receive Rs5 billion less than the last fiscal year.

Moreover, the federal government continues financing vertical health programmes. It is funding 16 vertical programmes including 9 schemes in health.



In its footnote, the World Bank criticised the last PPP government saying, “By passing the National Finance Commission Award before the 18th Amendment, the federal government violated the basic rule of decentralisation sequencing i.e. finance follows function”.

“As a result, the provinces disassociated the transfer of responsibilities emanating from the 18th Amendment from the additional resources allocated under the 7th NFC Award,” it added.

The federal government thus ended up retaining several big ticket vertical programmes within the devolved subjects, which continue to command a significant share of the federal PSDP.

Allocation for Ports & Shipping has been increased almost 4 times from Rs2.6 billion last year to Rs12 billion for fiscal year 2015-16 owing to the construction of Gwadar Port under the first phase of CPEC.

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

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