Past history suggests that the initial months in a fiscal year are usually drab vis-à-vis release of development funds. It is only during the later part of the year that disbursements are expedited. This year in FY13, the development funds release has perked up from the onset.
Planning Commissions latest data shows that the federal governments Planning & Development division had released Rs50 billion for PSDP projects between July 1 and September 14, 2012. It must be noted that for FY13, the federal government has earmarked a huge budget of Rs360 billion for PSDP projects, nearly three quarters of which will be financed from federal kitty and the rest is to be funded via foreign aid.
The funds release mechanism is such that the P&D Division will release PSDP funds up to Rs233 billion during the year. The projected foreign aid inflows of Rs100 billion will be received in the Economic Affairs Division. The cabinet and finance divisions will directly release Rs27 billion allocated under Special Programmes - a euphemism for political projects in selected constituencies.
The P&D Division is required to disburse 20 percent of its mandated PSDP funds in the first quarter ending September 30. Calculations show that the Division has already disbursed 21.5 percent of its disbursement ceiling of Rs233 billion, with over two weeks to spare till the end of the quarter.
It must be recalled that as the FY12 drew to a close, the P&D division had yet to release Rs58 billion against its mandated PSDP funding limit of Rs228.4 billion for that year. It seems that political factors, rather than structural issues are at work behind the recent, unusual acceleration in funds release.
It is instructive to know the quantum of PSDP spending by the cabinet and finance divisions, and also the foreign project assistance received in the EAD to date. However, such information is not publicly available, yet, which renders the analysis incomplete. Nonetheless, the details on PSDP disbursements, provided by the Commission, are helpful in following the 11-week long development trail.
Major funding beneficiaries include the Housing & Works division (Rs5.04 bn), Communications division (Rs4.94 bn) and the Kashmir affairs & Gilgit-Baltistan affairs division (Rs3.56 bn). Interestingly, four out of nearly five billion rupees released to the Housing & Works division were meant for development schemes and road infrastructure linked to the Prime Ministers constituency of Gujar Khan and adjoining areas.
Other government divisions receiving sizable slices of the pie include the Railways division (Rs3.3 bn), P&D division itself (Rs3.29 bn), Higher Education Commission (Rs3.16 bn), Fata (Rs2.86 bn) and Finance division (Rs1.74 bn). The Wapdas Water division was released Rs12.16 billion and its Power division projects received Rs1.55 billion till September 14.
The positive thing is that should this funding activity stimulates further in the coming quarters, the federal government may utilise the entire PSDP budget - something this government hasn been able to achieve in any of the last four fiscals. On the flip side, very few of these projects may actually create socioeconomic value or development if you may.
=================================================================================
Federal PSDP FY13 (Rs bn.)
=================================================================================
Sector Ongoing Throw FY13 budgetary FY13
Projects Forward allocations Releases*
(No.) (Cost) (Govt.) (Foreign Aid) (Jul.1 - Sep.14)
=================================================================================
Infrastructure 344 2,346.4 117.8 85.6 29.4
Social 671 546.8 135.2 8.4 19.2
Others 68 40.6 3 0 0.6
ERRA - - 4 6 0.8
260.0 100.0
Total 1,083 2,933.8 360.0 50.0
=================================================================================
Data source: Planning Commission * Against Rs233.0 bn
Comments
Comments are closed.