There has been a 10 percent improvement in fund utilisation under the Public Sector Development Programme (PSDP) in FY06. As against 63 percent utilisation up till April 2005, the utilisation in the corresponding period this year has been 73 percent.
And, government planners are confident that at least 90 percent of the total development outlay of Rs 272 billion will be spent by the end of June 2006.
The budgetary PSDP of the federal government was targeted at Rs 204 billion. The expenditure up to April 30, 2006 was Rs 149 billion ie 73 percent. Provinces were allocated Rs 68 billion under FY06 PSDP.
Their fund utilisation has been 73.5 percent or Rs 50 billion, which is slightly better than the federal government's. A further analysis of utilisation of PSDP indicates that the ministries/divisions entrusted with social development are lagging behind in implementation of projects. The Health Division was allocated Rs 9.439 billion. It has utilised a mere 40 percent with only two more months left in the fiscal year.
Similarly, the Education Division's performance, though better than Health in terms of utilisation, is still quite poor. As against an allocation of Rs 4.52 billion its fund utilisation is under 50 percent. The Railways Division on the other hand has already spent 100 percent of Rs 9.848 billion provided to it. The Water and Power Division has utilised 80 percent of the Rs 35.629 billion allocation.
The Population Welfare was allocated Rs 4.37 billion. Its utilisation is estimated at 70 percent of the allocation. Likewise, the Food, Agriculture and Livestock Division has utilised 70 percent of the allocated Rs 9.1 billion.
The Local Government Division was allocated Rs 50 million. Its utilisation is 60 percent. The Environment Division has fared badly with 50 percent utilisation of the allocated Rs 2.39 billion.
The Petroleum and Natural Resources have utilised 60 percent of the allocation of Rs 459 million. 70 percent of the capital outlay (civil works) has been utilised.
In budget FY06 the Ministry of Finance had asked all the ministries/divisions to provide a cash flow plan with quarterly expenditure with the schemes/proposals. After the approval of PSDP by the parliament, the Accountant General of Pakistan was instructed to release funds to the relevant ministries when demanded if they were in line with the quarterly expenditure plan provided by them and seeking approval of the Ministry of Finance was done away with.
Low utilisation, say sources, in most cases is due to poor absorption capacity and also the time consumed to approve new plans and provision of manpower. The implementation system needs to be reviewed and improved upon for achieving better utilisation and efficiency, sources added.
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