Pakistan’s development expenditure comes to standstill amid fiscal challenges
Sep 18, 2023
Islamabad [Pakistan], September 18 : Pakistan’s development expenditure has nearly come to a standstill, with just Rs 22.5 billion spent in the first two months (July-August) of the fiscal year, against an annual budget allocation of Rs 950 billion, Dawn reported.
This comes amid rising interest payments and disruptions caused by a change in the government.
Dawn is a Pakistani English-language newspaper.
As per data from the Ministry of Planning and Development, the actual expenditure on core development in two months further plunged to a mere Rs 8.1 billion after excluding the Rs 14.4 billion disbursed by the previous Pakistan Democratic Movement (PDM) government for its parliamentarians’ schemes, under the Sustainable Development Goals (SDGs) Achievement Programme (SAP), during the first 40 days of the fiscal year.
A senior official claimed that a significant portion of Rs 8.1 billion was spent before the caretaker government took office. This amount included Rs 2.8 billion utilised by water sector projects, Rs 1.5 billion in the power sector, and an additional Rs 1.4 billion in the information technology and telecom sector, covering both local and international contractual obligations. The remaining Rs 2.4 billion was spent by about three dozen federal ministries, divisions and corporations.
The Ministry of Planning and development authorised the release of Rs 135.4 billion for development projects during the first two months, accounting for about 14 per cent of the annual Public Sector Development Programme (PSDP) worth Rs 950 billion, as per Dawn.
Under the disbursement mechanism announced by the planning division, development funds allocated in the federal budget should be released at a rate of 20 per cent in the first quarter (July-Sept), followed by 30 per cent in the second (Oct-Dec) and third quarters (Jan-March), with the remaining 20 per cent in the last quarter (April-June) of each fiscal year.
As per the data, the PDM government had authorised the release of almost 70pc (Rs 61.3 billion) of the Rs 90 billion it had allocated in the budget for parliamentarians’ SAP schemes within first three weeks of the fiscal year.
In comparison, disbursements authorised for all the ministries, divisions and corporations amounted to only Rs 74 billion against their budgetary allocation of Rs 860 billion, just 8.6 per cent. Interestingly, these authorisations also included a major chunk of Rs 37.4 billion for the National Highway Authority (NHA), as per Dawn.
