For a change, the Federal Government kept its promise and did not slash the Federal PSDP allocations in the preceding fiscal year, 2011-12. Perhaps, that is what the Finance Minister meant to convey when he claimed in his budget speech that the entire FY12 PSDP funds had been released (this was on June 1). Yet the documents available in the public sphere strongly contest this assertion. The data available on Planning Commissions (PC) website, updated June 29, 2012, suggests major funding gap between development allocations and actual disbursals. In essence, the government went the other way round, funding its non-development priorities through holding up on the PSDP releases, not by cutting down on the allocations like past years. As of June 29, the PC had funded FY12 PSDP up to Rs.170.4 billion, against its mandated limit of Rs.228.4 billion. The progress on the foreign aid component worth Rs.38.6 billion, to be received in the Economic Affairs Division, is unclear. However, Rs.33 billion earmarked for "Special Programmes" have reportedly been exhausted by the cabinet and finance divisions earlier this year. Clearly, the government was sitting on at least Rs.58 billion of the PSDP allocations until June 29, and this funding gap may widen even more if the foreign component is also included. Expectations of major disbursements on June 30 cannot be high, given that the Commission released a paltry Rs.0.6 billion in the last five weeks of the outgoing fiscal year - supposedly a period of heightened activity vis-à-vis funds release and utilisation. The completion profile of the FY12 PSDP projects is rather mixed. Among the adequately funded divisions having a large PSDP footprint were the Communications division and NHA which received 65.12 percent of its allocations; the Water division projects of WAPDA received 64.5 percent of allocations; Railways, 64.17 percent; and the Planning and Development division received 85.7 percent of allocations. Among the underfunded divisions having large PSDP allocations are WAPDA power division projects (41.32%) and Pakistan Atomic Energy Commission (48.4%). Understandably, many of the ministries and divisions with smaller PSDP appropriations were relatively better funded. These included Establishment division (100%), EAD (98%), Revenue division (90.8%), Industries and Interior (86% each), and HEC (84%). There are many issues with the prevailing public sector development regime and nothing captures the gravity of the problem better than some consideration over nearly Rs.3 trillion worth of throw forward. In keeping with the past, it is expected that many new projects will be started in the fresh fiscal year, squeezing the resource pie further for existing projects in limbo. The socio-economic aspect of public sector development will further erode. There is a dire need to genuinely rationalise the PSDP portfolio, and to focus more on strengthening the human capital while addressing the infrastructure gaps across the country. To achieve a fast-tracked and coherent development landscape in the country, the states administrative capacity must be strengthened, along with enhanced coordination with the provinces vis-à-vis planning and capacity building.
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Federal PSDP FY12 (Rs bn.)
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Ongoing Throw FY12 budgetary FY12
Sector Projects Forward allocations Releases*
(No.) (Cost) (Govt) (Foreign Aid) (July 1-
June 29)
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Infrastructure 343 2270.8 127.7 31.2 88.1
Social 882 591.6 122.6 5.3 77.3
Others 81 40.9 3.3 0 1.8
ERRA - - 7.9 2.1 3.2
261.4 38.6
Total 1,306 2,903.2 300.0 170.4
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Data source: Planning Commission * Against Rs228.4 bn
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