Parliamentary penal informed: ‘PSDP allocations being revised downward on IMF instruction’

ISLAMABAD: A parliamentary panel, Thursday, was informed that Public Sector Development Programme (PSDP) allocations are being revised down on the instruction of the International Monetary Fund (IMF).

The Senate Standing Committee on Planning and Development which met here under the chairperson-ship of Senator Quratulain Marri was told by the officials of the Planning Ministry that the IMF has asked the federal government to avoid releasing funds for non-essential projects.

The committee discussed financial constraints and disbursement of funds under PSDP 2024-25, and utilisation of PIDE human resource.

While briefing the Committee, Secretary Planning Ministry informed that IMF has demanded revision of PSDP for the current financial year.

The revision of PSDP projects 2024-25 was demanded under the new loan programme. By December 2024, PSDP projects will be reviewed and reported to the IMF, he added. The IMF has also demanded that 100 per cent federal funding will not be provided to the provincial projects.

It was further informed that PSDP 2024-25 includes 66 projects worth Rs175 billion of Punjab. Similarly, PSDP includes 64 projects worth Rs488 billion of Sindh projects.

In the federal PSDP, 111 projects worth Rs429 billion were from Balochistan, while 20 projects of Khyber-Pakhtunkhwa (KPK) worth Rs72 billion is part of the federal development portfolio, Secretary Planning said.

The committee reviewed the disbursement of funds allocated for the PSDP for the fiscal year 2024-25. Originally approved at Rs1,400 billion by the National Economic Council (NEC) and Parliament, the PSDP budget was revised to Rs1,100 billion due to fiscal constraints. Adjustments in project-wise allocations were made, prioritizing core, foreign-funded, and near-completion projects.

The Finance Division outlined a release strategy for development funds, specifying quarterly disbursements of 15% for Q1, 20% for Q2, 25% for Q3, and 40% for Q4. On 27 August 2024, a one-line authorization for Rs155 billion was issued to all ministries and agencies for first Quarter (Q1) and that Rs31 billion out of this amount has been authorised for release to schemes under province and special areas.

The Ministry of Planning, Development and Special initiatives also briefed the committee on the total number of projects and funds disbursed to each province in the first quarter of current fiscal year.

The committee was concerned about the complexity of fund allocation process being currently adopted.

The committee directed the ministry to provide details on quarterly disbursement of funds under PSDP 2024-25 on province wise basis.

The committee reviewed the PSDP project for the construction of an international standard swimming pool at the Pakistan Sports Board (PSB) Coaching Center in Karachi. Approved by the DDWP on 12 April 2022 at a cost of Rs574.197 million, the project has received an allocation of Rs200 million for the current fiscal year. The committee noted that although the cost of project has been approved but steps must be taken by the ministry to ensure that there is an effective utilisation of funds and that the swimming pool should meet international standards.

The committee was annoyed over the absence of the Deputy Commissioner of District Layyah, Punjab, during the meeting to brief the Committee on land acquisition costs for the CDWP 1,200 MW Solar Power Plant project in District Layyah.

The committee issued directions to the ministry to ensure the presence of all concerned in the next meeting otherwise strict action will be taken as the committee has already spent considerable time on the agenda with no proper justification from the concerned on higher land acquisition cost estimated for the project.

The committee focused on addressing the financial inefficiencies within the Pakistan Institute of Development Economics (PIDE), which is currently facing financial constraints.

The committee reviewed a recommendation from the PIDE Advisory Board suggesting the potential dissolution of the institute, citing that foreign consultants are predominantly utilised for policy research, reducing the need for local researchers.

In response, the committee directed the removal of researchers who have not published a research paper in the past decade. Additionally, new rules were proposed, mandating that researchers must publish at least one paper per year to retain their positions.

Senator Marri expressed her astonishment at the fact that some researchers employed for over 25 years by PIDE had not produced any research papers. Consequently, the committee proposed a revision of the research output rules. The committee also addressed the performance evaluation of contract employees, stipulating that contract extensions should be based on a review of the employee’s contribution and necessity.

During the meeting, the private members bill proposing amendments to the China-Pakistan Economic Corridor Authority Act 2021 was deferred due to the absence of the bill’s mover.

The meeting was attended by senators Jam Saifullah Khan, Shahadut Awan, Zeeshan Khanzada, and Dr Afnanullah Khan, along with senior officers from relevant departments.

Copyright Business Recorder, 2024