ISLAMABAD: The development work in the public sector has slowed down in new fiscal year, as the planning ministry has authorized only Rs15.4 billion for spending due to less demand for budget by the line ministries.
From July through August 9, the planning ministry authorised to release Rs15.4 billion for spending under Public Sector Development Programme (PSDP) 2019-20, according to details issued by the ministry on Friday. The releases were only 2.2% of the annual PSDP allocation of Rs701 billion, showed the releases status.
About 29 percent of the total budgetary releases or Rs4.5 billion has been given to Higher Education Commission, largely for paying salaries.
Another sum of Rs4.3 billion or 27.6% of the releases has been sanctioned in favour of the Pakistan Atomic Energy Commission (PAEC), according to the Ministry of Planning. Out of this sum, a large chunk of Rs3.6 billion was given for construction of Karachi Coastal Power Project, which has been restored in the PSDP on demand of the International Monetary Fund (IMF). This project is funded by China.
The key ministries and entities that have large budget allocations for this fiscal year did not place major spending demands, said an official of the planning ministry. The National Highway Authority (NHA) that has annual allocation of Rs155 billion and Water Resources Division having annual budget of Rs85.7 billion did not seek funds for spending, according to the ministry official. No releases were sanctioned to these entities last month. The National Transmission and Dispatch Company that has an annual allocation of Rs42.5 billion also did not get releases, showed the planning ministry data.
The Ministry of Planning’s approval of funds has to be cleared by the Ministry of Finance before the central bank releases funds for spending. This gives a huge leverage to the finance ministry, which uses it as a tool to compensate for higher non-development expenditures. It is not clear how much money is authorised by the finance ministry against Rs15.4 billion sanctions.
Adviser to PM on Finance Dr Abdul Hafeez Shaikh had said in the post-budget press conference that the Rs701 billion PSDP spending was linked with the ability of the Federal Board of Revenue to achieve its Rs5.550 trillion annual tax collection target.
The annual development budget for the current fiscal year is Rs701 billion and according to the budget strategy of the finance ministry the ministries can be given up to Rs140 billion budget for spending for the first three months of this fiscal year.
