Punjab budget 2021-22: Foreign support of Rs51.099bn estimated

LAHORE: The Punjab budget 2021-22 has estimated the permanent debt (foreign) of Rs 51.099 billion.

As per the budget document, the Punjab government would receive budgetary support loans from World Bank under Punjab Education Sector Reform Program, Punjab Skills Development Project, Punjab Jobs and Competitiveness Project, Strengthening Markets for Agriculture and Rural Transformation (SMART), Punjab Green Development Program, Punjab Cities Program, and Punjab Resource Improvement and Digital Effectiveness (PRIDE) Program.

The revised estimates of FY 2020-21 were lesser than the budget estimates 2020-21 due to restructuring of Disbursement Linked Indicators (DLIs) of PESP-III and SMART Projects, which is under process with the consultation of World Bank, and owing to Covid-19 pandemic and subsequent lockdown.

The loans borrowed from multilateral donor agencies through the federal government for specific foreign-assisted development projects are termed as Development Capital Receipts or Foreign Project Assistance. The estimated receipts will be utilized for a number of development projects for which, a total of Rs 65.222 billion worth of loans for development projects are expected to be realized during the FY 2021-22 including 11 new projects (in pipeline) amounting to Rs 25.078 billion which are expected to be signed during next financial year and disbursements of these new projects will be received from respective donors accordingly.

As per budget document, the difference between the budget estimates and revised estimates for FY 2020-21, Rs 16.220 billion less disbursed, arose as work could not be executed due to Covid-19 and subsequent lockdowns.

Further, at the beginning of FY2020-21, claims of various provincial departments, pending with the federal government came to the tune of Rs. 99.58 billion (excluding NHP dues of approximately Rs. 56.9 billion). During the CFY, an amount of Rs 16.6 billion of PRA was settled and credited to Punjab. Whereas, the current claim of Rs 84.946 billion (excluding NHP dues) is still pending with the federal government. These claims, which if received, will create additional fiscal space in the development budget of the province, a source in provincial government said.

Copyright Business Recorder, 2021