ISLAMABAD: The Planning Commission has accelerated the disbursement of funds for development projects, since it authorized an expense of Rs257.17 billion in the first four months of the current fiscal year, almost 144 percent against Rs106bn for the same period of the year past.
According to data released by the commission on Sunday, it authorized the launch of Rs257.17bn for development projects as of November 1, 2019, which amounted to approximately 37pc of the annual allocation of Rs701bn.
During the corresponding period of last fiscal year, the commission had allowed an expense of Rs105.46bn, which represents 15.6pc of the full annual allocation of Rs675bn. This coincided with an International Monetary Fund (IMF) council to the federal and provincial governments to take full advantage of development funds as a stimulus to revive the economic growth estimated at 2.4pc for the current year.
According to the financial management formula in vogue, the ministries, divisions and other executing agencies must spend 20pc of each of the development allocations in the first and second quarter of the fiscal year, followed by 30pc each in the third and fourth quarters. In the case of wages and pensions, the disbursement of funds could be allowed to increase 25{7be40b84a6a43fc4fae13304fce9a2695859798abfc41afd127b9f8b21c5f9c5} of the annual budget in each quarter.
That would mean that total launches for development projects could touch 40{7be40b84a6a43fc4fae13304fce9a2695859798abfc41afd127b9f8b21c5f9c5} of the annual allocation in the coming days against the target set for the first half of the year.
This is the first time in recent history that disbursements in the first four months under the public sector development program (at 37 percent) have come so close to the 40 percent target for the first quarter.
But almost 60 percent of the first four months of disbursements this year were taken for just four elements. This included releases of Rs80bn for the National Highway Authority, mainly implementing the China-Pakistan Economic Corridor project, which represents 52 percent of its annual share of Rs155bn. Another important part of Rs26.78bn was spent on improving security against a total allocation of Rs32bn. That meant that more than 82pc of funds allocated to improve security throughout the fiscal year are already disbursed.
Another important part of Rs12.8bn was released for the development of merged tribal districts of Khyber Pakhtunkhwa for which the government has established an allocation of Rs72bn for the current year. In addition, Rs30bn was provided to the water sector against an allocation of approximately Rs86bn.
In addition, another large part of Rs16bn was released to the Cabinet Division for five major development projects in Karachi and smaller schemes under the Sustainable Development Goals. The release of Rs2bn for the SDGs was carried out through parliamentarians of the ruling party.
Special Development Program
The Planning Commission said no funds were made available to the special development program for which Rs32.5bn has been allocated for the current year.
The commission reported that it authorized the payment of Rs114bn (37.62pc) to the normal development program of federal ministries in four months of the current fiscal year against an allocation of Rs304bn.
Gilgit-Baltistan received an amount of Rs6.57bn compared to more than Rs7.8bn last year, showing a decrease of approximately 19pc. Azad Kashmir has received Rs10.64bn so far this 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 for the comparable period last year. The government has now stopped making public the funds provided to the Atomic Energy Commission of Pakistan. The Ministry of Railways has received Rs5.4bn so far this year compared to Rs4.17bn for the same period last year.
This comes after a new fund release policy for the 2019-20 fiscal year recently notified by the ministry of finance. All ministries, divisions, provincial and regional governments have been instructed to meet quarterly objectives. They have been informed that cases related to international and national contractual or mandatory payments beyond the above limits will be considered on a case-by-case basis and relaxation will require the prior approval of the secretary of the ministry of finance.
In the case of the Public Sector Development Program, the Ministry of Finance has notified that the Planning Division will not release funds for unapproved projects and funds for the first quarter, not exceeding Rs500 million. The amounts exceeding Rs 500 million will be sent to the Finance Budget Division for the necessary forms and means.
The Planning Division will recommend the funds for the second quarter onwards after due consideration and scrutiny to the Finance Division to obtain forms and means of authorization along with an effective or work plan, the report on the use of duly reconciled funds with the General Accountant of Revenue of Pakistan and the approval of the chief accountant of the ministry or division in question. If for any project, no funds have been released during the first two quarters, only 40{7be40b84a6a43fc4fae13304fce9a2695859798abfc41afd127b9f8b21c5f9c5} of the allocation for the remaining two quarters would be released.
Published on Dawn, November 4, 2019
Source: https://www.dawn.com/news/1514712/disbursement-of-funds-for-uplift-projects-speeded-up