ISLAMABAD: The International Monetary Fund (IMF) has asked Pakistan to review its Public Sector Development Programme (PSDP) for the current fiscal and stop financing provincial projects through federal resources.

Therefore, the government has decided that funds for unimportant projects would not be released despite allocations in the budget, the secretary to planning and development Awais Manzur Sumra informed the Senate Standing Committee on Planning, Development, and Special Initiatives on Thursday.

The meeting was presided over by Senator Quratulain Marri.

A report would be submitted to the IMF by December after a review of all PSDP projects, Mr Sumra told the committee.

Money for ‘unimportant’ projects won’t be released despite allocations

He said the IMF wanted a review of the PSDP for 2024-25 and disapproved of 100 per cent federal funding for provincial development projects.

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The IMF demand, the secretary added, was a part of the $7bn Extended Fund Facility (EFF) for 37 months on which the Fund and Pakistani officials had reached a staff level agreement on July 12, but its approval by the executive board is still pending.

In reply to questions, the secretary said PSDP for 2024-25 included 66 projects for Punjab worth Rs175 billion and 64 projects for Sindh worth Rs488bn.

There are 111 projects for Balochistan worth Rs429bn and 20 for Khyber Pakhtunkhwa worth Rs72bn.

This came to the fore as the Senate committee reviewed the disbursement of funds allocated for PSDP 2024-25. Originally approved at Rs1.4 trillion by the National Economic Council (NEC) and parliament, the PSDP budget was revised to Rs1.1tr due to fiscal constraints, the committee was told.

Adjustments in project-wise allocations were made, prioritising core, foreign-funded, and near-completion projects.

The Finance Division outlined a release strategy for development funds, specifying quarterly disbursements of 15pc for first quarter, 20pc for Q2, 25pc for Q3, and 40pc for Q4.

On Aug 27, a one-line authorisation for Rs155bn was issued to all ministries and agencies for the first quarter (Q1) and that Rs31bn out of this amount has been authorised for release to schemes under the Province and Special Areas head, the meeting was told.

The planning ministry briefed the panel on the total number of projects and funds disbursed to each province in the first quarter of the current fiscal year.

The committee expressed concern over the complexity of the fund allocation process being currently adopted. It directed the ministry to provide details on quarterly disbursement of funds under PSDP 2024-25 on a province-wise basis.

Pide under scrutiny

The Senate committee focused on addressing financial inefficiencies within the Pakistan Institute of Development Economics (Pide). The body reviewed a recommendation from Pide’s advisory board suggesting dissolution of the institute, saying that foreign consultants were being utilised for policy research, reducing the need for local researchers.

In response, the committee directed the removal of researchers who have not published a single research paper over the past decade.

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Additionally, new rules were proposed, mandating that researchers must publish at least one paper per year to retain their positions.

Senator Marri expressed astonishment at the fact that some researchers working for over 25 years had not produced any research papers. Consequently, the committee proposed a revision of the research output rules.

It also addressed the performance evaluation of contract employees, stipulating that extensions should be based on a review of the employee’s contribution and necessity.

While reviewing the PSDP project for the construction of an international standard swimming pool at the Pakistan Sports Board’s (PSB) coaching centre in Karachi, the committee called for an effective utilisation of funds.

The committee expressed frustration over the absence of the deputy commissioner of Punjab’s Layyah district from the meeting.

He was asked to attend the session for a briefing on land acquisition costs for a 1200MW solar power project.

The committee directed the ministry to ensure the presence of all officials concerned at the next meeting.

Published in Dawn, September 6th, 2024