Underutilisation of funds allocated for PSDP

Utilisation of funds earmarked for Public Sector Development Programme (PSDP) has been a perennial problem in Pakistan. Whatever is provided in the budget under PSDP remains grossly underutilized for a number of reasons including slow and cumbersome procedures for the release of funds and the lethargic attitude of the implementing authorities who are required to submit their financial requirements and account for the money already released.
The problem is so severe that it has been highlighted a number of times by international financial agencies and other donors. Realising the gravity of the problem, National Economic Council (NEC) decided last year to expedite the process by removing a number of bottlenecks and providing facilities so that implementation of projects is not delayed due to bureaucratic hurdles.
It was hoped that this action of the National Economic Council (NEC) would change the situation for the better and ensure proper utilisation of funds provided under PSDP for 2004-05.
There are clear indications, however, that these hopes may not materialise. According to a report, release of funds for development projects for the second quarter of 2004-05 is in jeopardy as several ministries have failed to submit their cash/work plans essential for further release of funds allocated for PSDP.
Since the Planning Commission and the Finance Ministry have instructions to release funds only after monitoring the implementation on quarterly basis and thoroughly reviewing cash/work plans, the release of funds for these ministries' projects for the second quarter would obviously be held up. It is reported that the ministries having budgetary allocations for over 40 development projects are facing a lot of difficulties in pushing their plans for further release of funds.
According to the 2004-05 PSDP, the ministries which had 40 or more projects included Higher Education Commission, Information Technology, Telecommunications, Education, Works, Food, Agriculture and Livestock and Women Development.
The deadline for submission of cash/work plans on which the release of finds for next quarter depended was 19th September, 2004. The delay in submission of plans, according to certain sources, was also caused by the modification in pro-forma to be filled in by project directors and concerned ministries.
Whatever the reasons for the delay in the release of resources under PSDP, such a development is highly disturbing. PSDP, as is well known, is the primary vehicle to expedite development work in the country, upgrade infrastructure, meet neglected social sector requirements, generate employment and alleviate poverty.
As the government was committed to the achievement of these goals, the size of PSDP was increased enormously from Rs 160.0 billion in the previous year to Rs 202.0 billion during 2004-05. Authorities were also planning to expand the fiscal space in order to increase this amount in the subsequent years. However, it now seems that the whole exercise of providing more funds under PSDP would be largely futile if the utilisation capacity of the implementing authorities remains poor.
Also, the claims of the government to remove irritants with a view to bringing performance at par with the plans appear to be unfounded. With the reports now emanating from official sources, it is obvious that the NEC has to seriously reconsider the matter and reprimand the officials responsible for the lapse. Due attention should also be given to the genuine grievances of the implementing authorities.
Failing this, the government's credibility would suffer further and people's dreams of a better future would remain largely unfulfilled.