Kudos to the Planning Commission for standing up for development! Well, for standing up somewhat, as far as numbers are concerned. Despite a tight fiscal situation, the Commission went on to release Rs639 billion for the federal public sector development programme (PSDP) as of June 30, 2019. That’s wrapping up FY19 with a 95 percent utilization of the twice-revised FY19 PSDP budget of Rs675 billion.
The highlight of the year was the foreign aid really coming through. The Rs208 billion on that count accounted for 33 percent of total funding released in FY19. The number is significantly higher than Rs162 billion or 21 percent that has been budgeted under foreign aid. In contrast, the federal government was supposed to fund 79 percent of the PSDP allocations last fiscal, but financed 67 percent of it in the end
In numerical terms, the FY19 releases are Rs157 billion shy of the authorizations in the previous year. However, the funds utilization ratio of 95 percent is a vast improvement over FY18, when the PlanCom released 80 percent of the funds for uplift projects. Actual spending numbers will be known by next month when the finance ministry would release its year-end fiscal dataset.
The just-concluded fiscal year was the PTI government’s first year in office. Perhaps it’s a fair question to ask how successful the social-sector-oriented party has been in reorienting funding priorities at the center. An analysis of the FY19 PSDP numbers shows that the composition of funding has not changed much in comparison to previous years.
There continues to be a high degree of concentration in funding. Top-three PSDP recipients accounted for roughly 60 percent of the total funds released in FY19 – identical to the previous fiscal year. Top-five recipients grabbed 72 percent of the funded portfolio – slightly up from 69 percent in FY18. Needless to add that such major recipients were funded reasonably well compared to their budgetary allocations.
Chief among them is the National Highways Authority (NHA), which received 36 percent of PSDP funds (FY18: 43%). Receiving Rs231 billion, the NHA was handed out 125 percent of what it was promised in the budget. At number two is Wapda’s water division with a 12 percent share in the overall funding (FY18: 4%). Up next is the Special Areas (AJK, GB and Fata) that sliced 11 percent of the pie (FY18: 8%).
The ongoing fiscal year should allow the government more leeway in making development more broad-based. It is true that infrastructure development falls mostly in the domain of the federal government, and it looks like it will continue to command significant funding. Be that as it may, the level and share of funding for sectors like health, food security, IT, youth affairs and climate change also needs to pick up.
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