On PSDP spending

It seems that the federal government would close this fiscal year with some healthy development spending. Data from the Planning Commission show that as of May 13, 2016, the federal government had released about 68 percent of the Rs700 billion Public Sector Development Programme (PSDP) budget for FY16. Much like previous years, disbursements are expected to accelerate in final weeks of this fiscal.

Four-fifth of the Rs700 billion PSDP has to be funded by the federal government. The federal government has thus provided Rs392.6 billion, which amounts to 71 percent of the funds that the government has to furnish from its kitty. The remaining fifth of the PSDP budget (Rs146.2 billion) is to be funded through foreign development aid, for which the amount received as of May 13 has been Rs81.5 billion, about 56 percent.

So far this year, the power and water sectors have received special focus. Wapda's power projects received 101.8 billion, roughly 90 percent of their development budget. Similarly, Wapdas' water sector schemes got Rs21.8 billion, or 72 percent of the allocated funds.

It comes as a bit of a surprise that under the infrastructure-loving PML-N regime, the National Highways Authority (NHA) remains visibly under funded this fiscal. The NHA's development funding remained limited to Rs74.6 billion, or 47 percent of the Rs159.6 billion that was earmarked for it in the budget. It is not the government which has under-spent on NHA. It is the foreign aid that has been lagging in these projects.

"Special Areas" - which included Azad Jammu and Kashmir, Gilgit-Baltistan, and Fata region - were among the few recipients that got almost all of their allocations funded, receiving Rs42.2 billion, against a development budget of Rs42.9 billion. But this is not unusual for federal government that likes to keep the development budgets of these regions adequately financed. The government also spent Rs65 billion, against an earmark of Rs100 billion, for rehabilitation of war-displaced people and enhancement of security.

The well-funded among the rest of development-heavy federal government ministries, divisions, and corporations were the Interior division, ERRA, National Health Services and Regulations division, Higher Education Commission, and Pakistan Atomic Energy Commission. The government has so far funded 100 percent of the "MDGs and Community Development Programme" and two-thirds of the "Prime Ministers Youth Programme".

The political heat post-Panama revelations have arguably caused the PML-N government to adopt a more populist posture in recent weeks. The Prime Minister has lately shown a combative, campaign-style posture. If that continues, expect PSDP spending to swell up even more in the coming weeks as political urgency takes hold.