ISLAMABAD: The country’s development programme continues to struggle, as total spending in the first 10 months of FY24 amounted to just 37.5 per cent of the annual budget allocation.

The latest development expenditure data released by the Planning Commission put the total 10-month expenditure on the Public Sector Development Programme (PSDP) at Rs353bn, against the budgetary allocation of Rs940bn.

This was despite a couple of bulky disbursements for the parliamentarians’ scheme (Rs43.6bn), dedicated shares of special areas like Azad Kashmir and Gilgit-Baltistan (Rs55bn), the water sector (Rs52bn), national highways (Rs58bn), and Rs39bn of the power sector. Even the development funds used in AJK, GB, and merged districts of KP were too low compared to the target.

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Under the disbursement mechanism announced by the Planning Division, the development funds allocated in the federal budget should be released at the rate of 20pc in the first quarter (July-September), followed by 30pc each in the second (October-December) and third quarter (January-March) and the remaining 20pc in last quarter (April-June) of each fiscal year.

Programme slowed despite heavy disbursements to certain sectors

Under this principle, the overall PSDP projects should have spent about 87pc (around Rs820bn) in the first 10 months, against only 37.5pc (Rs353bn) actually spent, as they also involved dams, roads, health, education, and so on.

Likewise, the special areas’ development activities should have consumed about Rs147bn (87pc) in 10 months instead of just Rs55bn actual consumption.

The latest data suggest that the parliamentarians’ scheme consumed about Rs43.6bn — almost 50pc of Rs90bn budgetary allocation — in 10 months (July-April). Excluding special areas and MNAs’ schemes, the country’s infrastructure and development appeared to be struggling at just Rs252bn in 10 months.

The official data showed that excluding the parliamentarians’ scheme, the actual development expenditure by three dozen ministries and divisions in ten months amounted to just Rs255bn against their annual allocation of Rs653bn, accounting for about 39pc.

About Rs52bn was spent in the water sector against its annual allocation of Rs110.5bn, accounting for about 47pc in 10 months. Likewise, Rs97bn was spent in 10 months by two other major sectors — National Highway Authority (NHA) and power companies — against their total allocation of Rs212bn for the year even though substantial foreign exchange inflows had materialised in these two sectors. The NHA consumed Rs58bn of its Rs156bn allocation while power companies utilised Rs39bn against Rs55.3bn allocation for the year.

Ironically, the Higher Education Commission (HEC) could utilise only Rs24bn in 10 months against its annual share of Rs60bn, while the Housing and Works Division spent Rs13bn of its Rs41bn allocation. The Railways Division’s utilisation remained unmoved at Rs18.8bn spent in the first eight months against its annual allocation of Rs33bn.

The data showed the government has, in 10 months authorised for disbursement a total of Rs508bn, almost no additional authorisations in February-April as its authorisations stood at the same level by end-January. It included Rs372bn for 36 ministries and divisions (including Rs61.3bn for MNAs) and Rs127bn for NHA and power companies.

This will be the third year in a row that the country’s under-funded infrastructure development would remain constrained by drastic cuts even in funds allocated by the parliament. Last year, the development programme was marred by massive floods. As a result, the development projects would face serious negative impacts of insufficient funding, thus affecting the standards of living of the people already suffering from record inflationary trends.

Published in Dawn, May 11th, 2024