The present dispensation in the country, like many of its discredited predecessors, seems to be rather long on plans and promises, but disappointingly short on implementation, particularly as far as the Public Sector Development Programme (PSDP) is concerned.
The Planning Commission's mid-year review, which was released the other day, has identified endemic delays in release of funds and a host of procedural bottlenecks as the main causes of non-execution of public sector projects in the country.
The other major cause of the problem, catalogued in the Planning Commission report, is the continued ban on recruitment in Punjab and Sindh. The twin impediments have adversely impacted execution of even some high profile projects such as Khushhal Pakistan and Roshan Pakistan.
The Planning Commission report has claimed that utilisation of funds under Khushhal Pakistan Fund, as well as spending on village electrification under Roshan Pakistan remains "nil".
The extent and degree of this "fund starvation" of public sector, as elaborately detailed in the Planning Commission report, is discernible in all sectors, including infrastructure, power, petroleum and natural resources, telecom, IT, industries, etc.
According to the figures quoted in the document, the PSDP 2005-06 had envisaged an expenditure of Rs 272 billion on uplift projects, with a federal share of Rs 204 billion, including foreign aid amounting to Rs 41 billion. However, the government released only an amount of Rs 64.5 billion during July-December (39.6 percent) against the total allocation of Rs 163 billion.
The compiler of the report has claimed that in most of the cases the "savings" have been re-allocated to the same sector in fast-track projects either for their expeditious completion during the current fiscal year or for fulfilling contractual obligations within the approved cash plan.
The trouble seems to lie with the midway re-setting of PSDP priorities, which at times appear to be influenced by personal whimsicalities.
The problem basically stems, of course, from the huge discrepancy that exists between the government's ambitious uplift goals and its restricted delivery capacity. Another negative factor is the spiralling credibility deficit that marks the government's implementation strategy.
It will be recalled that the National Economic Council had approved in May last year the five-point development-and-growth oriented strategy for 2005-06 which envisaged water security, energy security, infrastructure development, human and social sector development as its main priority areas.
Further, the strategy had fixed the GDP growth target for 2005-06 at seven percent. According to experts, the government expenditure used to be traditionally categorised into revenue expenditure and capital expenditure. But with the adoption of the policy of planned economic development, the budget became an instrument for carrying out the objectives of the Plan, and hence it became necessary to distinguish between expenditure, which contributed to economic development, and the non-development expenditure.
Pakistan's ruling elite has unfortunately placed greater stress on the latter category. As pointed out earlier, the government's failure to meet the PSDP targets largely arises from the mismatch between its extremely circumscribed delivery capacity and its ambitious uplift goals, obviously to garner some useful propaganda points.
The Planning Commission is said to have originally agreed to ensure implementation of uplift projects, but later severe budgetary constraints and unforeseen emergencies such as increase in oil prices, and the expenditure incurred on earthquake relief operations, stymied implementation of PSDP. Surprisingly, the donor countries that had pledged aid totalling over $6 billion have yet to honour their commitments.
Despite the UN Secretary-General's appeal, and the appointment of former US President George Bush as his special envoy for earthquake relief, the progress on the ground remains palpably slow and inadequate. All these factors seem to have forced the government to make some well-targeted diversions of funds to meet the emergency. Whatever the actual causes of the massive implementation deficit, the system's capacity to deliver remains painfully restricted, which needs to be suitably developed.
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