Jul-Sep: PSDP spending

When the federal government announced a massive Rs800 billion development budget (PSDP) for the current fiscal year in June, it raised the question whether PSDPs maximum utilization would be achieved. After the end of first quarter, the development funds have been trickling down at a subdued pace.
As per the latest data released by the Planning Commission (PC), total PSDP releases were Rs110.44 billion, as of September 30, 2016. This amounts to 14 percent of the budgeted figure. Of the Rs800 billion PSDP, 82 percent is to be funded by federal government and the rest through foreign aid. No foreign grant money was released during this period and all the 1Q funding was released by federal government.
Low spending and lack of foreign grants in the first quarter are not unusual. Back in 1QFY15, the spending level was 10 percent of the budgeted PSDP. And in 1QFY14, PSDP spending was slightly better, but still less than the 20 percent spending threshold that is usually set by the PC for the first quarter of the fiscal.
Bulk of the 1Q PSDP funding - Rs41.22 billion - went to the Special Development Programme for Temporarily Displaced Persons and Security Enhancement. Under that head, Rs100 billion PSDP funds have been budgeted this year.
Among other major recipients, the National Highways Authority was released Rs18.88 billion - or 15 percent of its budgetary outlay from the federal government. Special Areas - Fata, AJK, and GB regions - were provided development funds worth Rs11.38 billion, about a quarter of their promised earmark. Railways division was released Rs9.37 billion, nearly a quarter of its share in federal PSDP.
About Rs5.5 billion went to the National Health Services division - or 22 percent of its budgeted grant from federal government.
The Higher Education Commission received Rs4.29 billion, a fifth of its development funds due from the federal government. The water division of Wapda was released Rs3.29 billion, which would be about 11 percent of its budgeted funds from the federal government.
In its first three years, the PML-N federal government spent on PSDP Rs441 billion in FY14, Rs502 billion in FY15, and Rs602 billion in FY16 - a trend of not only double-digit growth in PSDP spending but also that of an increasing utilization of development budget, something missing in the previous government.
Based on this track record and an approaching election-related cacophony come 2017, it appears that PSDP budget this year, too, might remain reasonably funded.