Spending on development fell significantly

Spending on development by the federal government has declined significantly - from 14.8 per cent of total expenditure in 2008-09 budget to 7.6 per cent in the fiscal year 2010-11, an analysis of statistical data revealed. The President announced in his speech to the joint sitting of parliament that the government spent Rs 2.2 trillion on development programme during last four years and did not dwell on the decline in development expenditure as a percentage of total expenditure.
Analysis of the documents reveal that federal government has spent Rs 1,098 billion on development projects during the last four years (2008-09 to 2011-12) and Rs 304.8 billion on other development expenditure (inclusive of Benazir Income Support Programme and People's Works Programme (PWP)-I and PWP-II). This does not include Rs 1,062 billion utilised by the provincial governments during the last four years because of fiscal administrative control granted to them through the National Finance Commission (NFC) Award and passage of 18th Amendment. However, the percentage utilisation on development outlay (federal plus provincial plus other development expenditure) as a percentage of total expenditure was static at 24 percent for the first two years of the PPP government when Shaukat Tarin was the Finance Minister. This declined to around 20 percent in 2010-11. In the current fiscal year the government budgeted spending 29 percent on total development however this is regarded by nearly all in the Finance Ministry as a pipedream.
Analysis of the data further reveals a steady decline in development spending as percentage to the total expenditure from 2008-09 onward as Rs 308 billion allocated for PSDP in the federal budget for the fiscal year 2008-09 was 14.75 per cent of the total expenditure of Rs 2087.027 billion. However, in the subsequent fiscal year 2009-10, the allocation of Rs 294 billion for PSDP decreased to 11.37 per cent of the total expenditure of Rs 2,586 billion. The government allocated Rs 196 billion in the federal budget for development projects which was 7.6% of the total expenditure of Rs 2559.367 billion.
Analysts attributed the steady decline to development expenditure from 2008-09 onward on failure to control the current expenditure and financing the widening budget deficit. The government's inability to maintain fiscal discipline was evident from the upward revision of current expenditure.
The current expenditure for fiscal year 2008-09 was revised upward from Rs 1,493 billion to Rs 1,649 billion. The government also made an upward revision in current expenditure for 2009-10 - from Rs 1699 billion to Rs 2017 billion and for 2010-11 from Rs 1997 billion to Rs 2295 billion. The federal government spent Rs 43.9 billion for other development expenditure in 2008-09, Rs 118 billion in 2009-10, Rs 45.5 billion in 2010-11 and earmarked Rs 97 billion for the ongoing fiscal year.

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Development spending

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Year        Federal     Provincial    Other     total Total federal  Total dev

              PSDP        PSDP       develop          and province     as % of

                                       exp            expenditure    total exp

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2008-09        308         150        43.9       501.9        2087          24

2009-10        294         216         118         628        2585          24

2010-11        196         266        45.5       507.5        2559        19.8

2011-12        300         430          97         827        2767        29.8

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