ISLAMABAD: The Planning Commission has speeded up disbursement of funds for development projects as it authorised spending of Rs257.17 billion in the first four months of the current fiscal year — up almost 144pc against Rs106bn for the same period last year.

According to data released by the commission on Sunday, it has authorised the release of Rs257.17bn for development projects as of Nov 1, 2019, that amounted to about 37pc of the full year allocation of Rs701bn.

During the corresponding period last fiscal year, the commission had allowed Rs105.46bn spending, accounting for 15.6pc of the full year allocation of Rs675bn. This coincided with an advice by the International Monetary Fund (IMF) to the federal and provincial governments to make maximum utilisation of development funds as stimulus to revive economic growth estimated at 2.4pc for the current year.

Under the financial management formula in vogue, the ministries, divisions and other executing agencies are required to spend 20pc each of the development allocations in first and second quarter of the fiscal year followed by 30pc each in the third and fourth quarter. In case of salaries and pensions, disbursement of funds could be allowed to go up 25pc of annual budget in each quarter.

That would mean the total releases for development projects could touch 40pc of annual allocation over the next few days against the target set for first half of the year.

This is first time in recent history that disbursements in first four months under public sector development programme (at 37pc) have come so close to 40pc target for the first quarter.

But almost 60pc of the first four month disbursements this year were grabbed by just four elements. This included Rs80bn releases for National Highway Authority, mostly implementing the China-Pakistan Economic Corridor project, accounting for 52pc of its annual share of Rs155bn. Another major chunk of Rs26.78bn was spent on security enhancement against a total allocation of Rs32bn. That meant more than 82pc funds allocated for security enhancement through the full fiscal year already stand disbursed.

Another major chunk of Rs12.8bn was released for the development of merged tribal districts of Khyber Pakhtunkhwa for which the government has set an allocation of Rs72bn for the current year. Likewise, Rs30bn were provided to the water sector against an allocation of about Rs86bn.

Moreover, another big share of Rs16bn was released to Cabinet Division for five major development projects in Karachi and smaller schemes under the Sustainable Development Goals. The release of Rs2bn for SDGs was made through ruling party parliamentarians.

Special development programme

The Planning Commission said no funds were made available to the special development programme for which Rs32.5bn have been allocated for the current year.

The commission reported that it authorised payment of Rs114bn (37.62pc) to the country’s normal development programme of the federal ministries in four months of the current fiscal year against an allocation of Rs304bn.

Gilgit-Baltistan was provided an amount of Rs6.57bn compared to more than Rs7.8bn last year, showing a decline of about 19pc. Azad Kashmir has been provided with Rs10.64bn so far during the current year compared to Rs10.77bn last year.

The government has also released Rs11.5bn to the Higher Education Commission this year compared to Rs4.66bn of the comparable period last year. The government has now stopped making public the funds being provided to the Pakistan Atomic Energy Commission. The ministry of railways has been given Rs5.4bn so far this year compared to Rs4.17bn of same period last year.

This comes following a fresh policy for release of funds for the fiscal year 2019-20 notified by the ministry of finance recently. All ministries, divisions, provincial and regional governments have been directed to follow quarterly targets. They have been informed that the cases relating to international and domestic contractual or obligatory payments beyond the above limits shall be considered on case-to-case basis and relaxation shall require prior approval of the secretary of the finance ministry.

In case of the Public Sector Development Programme, the finance ministry has notified that no funds shall be released for un-approved projects and funds for first quarter, not exceeding Rs500 million, shall be released by the Planning Division. Amounts exceeding Rs500m shall be referred to Budget Wing of Finance Division for ways and means clearance.

Funds for second quarter onwards will be recommended by the Planning Division after due examination and scrutiny to the Finance Division for ways and means clearance along with a cash or work plan, utilisation report of funds duly reconciled with the Accountant General of Pakistan Revenues and approval of the principal accounting officer of the ministry or division concerned. If for any project, no funds have been released during the first two quarters, only 40pc of the allocation would be released for remaining two quarters.

Published in Dawn, November 4th, 2019