The federal spending on the public sector development programme seems to be going full steam, as of the close of the first quarter of FY13. Speedy disbursal of PSDP funds was obvious right from the initial weeks of FY13, which is normally the case towards the tail end of a fiscal year in Pakistan.
The latest data released by the Planning Commission shows that the Planning & Development division released Rs60.9 billion for PSDP projects between July 1 and October 5. The total size of the federal PSDP portfolio is very large this year at Rs360 billion - 75 percent of which will be funded by the federal government and the rest via foreign assistance.
To give a complete picture the PSDP funds release mechanism entails that the P&D Division release funds up to Rs233 billion in FY13. The projected foreign aid inflows of Rs100 billion are to be received in the Economic Affairs Division. The cabinet and finance divisions will directly release Rs27 billion allocated under Special Programmes, which include two phases of Peoples Works Programmes.
Speedy disbursal trend is obvious. The P&D Division was supposed to release 20 percent of its mandated PSDP funds in the first quarter ending September 30. Yet the Division had disbursed over 26 percent of its ceiling of Rs233 billion, as of October 5. Twenty percent of the funds are to be released in the second quarter, 25 percent in the third quarter, and 35 percent in the last quarter of FY13.
Details of the projects funded so far show that the divisions and ministries which received sizable funding so far include P&D division (Rs7.58 bn), Railways division (Rs6.63 bn), Kashmir Affairs & Gilgit-Baltistan Affairs division (Rs5.47 bn), Housing & Works division (Rs5.04 bn), Communications division (Rs4.94 bn), Higher Education Commission (Rs3.16 bn), Fata (Rs2.86 bn) and Finance division (Rs2.09 bn).
The Water & Power division received Rs1.55 billion for the land acquisition project for the construction of Diamer Basha Dam. The divisions water-related projects were provided Rs12.16 billion during the period.
The P&D division has been funding various social sector projects since the 18th Amendment. Some of these projects receiving major funding from PSDP are various vertical health programmes, population welfare programmes (in the four provinces, GB, AJK and Fata), and the National Programme for Family Planning and Primary Healthcare.
Acceleration in the release of development funding may be taking cues from the urgencies of scheduled parliamentary elections down the road. However, such expediency may render an already faulty paradigm of public sector development even more irrelevant for public good and socioeconomic gains.
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Federal PSDP FY13 (Rs bn.)
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Ongoing Throw FY13 budgetary Throw
Sector Projects Forward allocations FY13 Releases*
(No) (Cost) (Govt) (Foreign Aid) (Jul.1-Oct. 5)
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Infrastructure 344 2,346.4 117.8 85.6 32.9
Social 672 546.8 135.2 8.4 26.4
Others 68 40.6 3 0 0.7
ERRA - - 4 6 0.8
260.0 100.0 -
Total 1,084 2,933.9 360.0 60.9
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Data source: Planning Commission * Against Rs233.0 bn
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