Govts dole out uplift funds to MNAs as development spending falters

ISLAMABAD: As development spending continued to falter in the first eight months of the current fiscal year, successive governments kept doling out funds for the discretionary schemes of parliamentarians, according to official data.

In the past eight months, parliamentarians consumed Rs38 billion out of the allocated Rs90bn in the budget for their schemes, as per the latest data on development expenditure released by the Planning Commission.

The development activities under all the other 34 federal ministries during the 8MFY (July-February) kept struggling with a combined expenditure of just Rs107bn.

The total expenditure under the entire Public Sector Development Programme (PSDP) stood at Rs237bn in eight months, over Rs13bn less than Rs250.3bn in the same period last year.

This also included spending on corporations, special areas like Azad Kashmir, Gilgit-Baltistan and merged districts of the formerly Federally Administered Tribal Areas.

Parliamentarians get 42.22pc of allocated funds in 8MFY24

In absolute terms, special areas, including Azad Kashmir, GB and merged tribal districts, received the most funding with Rs46.6bn in eight months, followed by Rs37.98bn for the parliamentarians’ scheme.

The funding for special areas was around 27.4 per cent of their budgetary allocation of Rs170bn. Meanwhile, MNAs schemes have already received 42.22pc of funds out of their allocated Rs90bn.

In October 2022, the then Pakistan Democratic Movement (PDM) government increased the allocated amount for schemes — dubbed the Sustainable Development Goals Achievement Programme (SAP) — to 87bn, ensuring that all of the coalition’s then 174 members of National Assembly get Rs500m for implementing small projects like sewage lines, gas, water and electricity connections, and repair and maintenance of streets in their constituencies.

The same government subsequently enhanced the funds by Rs3bn to Rs90bn for the current fiscal year and authorised the release of Rs61bn before leaving office in the second week of August 2023.

By Aug 31, only Rs14.4bn had been utilised. The amount jumped to Rs22.9bn by the end of Q1 on Sep 30 and crossed Rs35bn by Dec-end, accounting for 39pc of the annual allocation.

In January 2024, the Special Investment Facilitation Council (SIFC) and the National Economic Council (NEC) decided to cap SAP funds at Rs61bn, which were already authorised for disbursement and save the remaining Rs30bn for deficit financing.

The mechanism

Under the disbursement mechanism announced by the Planning Division, the development funds allocated in the federal budget should be released at the rate of 20pc in the first quarter (July-September), followed by 30pc each in the second (October-December) and third quarters (January-March).

The remaining 20pc is released in the last quarter (April-June) of the fiscal year.

Under this principle, at least 70pc or Rs120bn should have been released for development activities in special areas by now.

But the actual consumption has been Rs46.6bn only.

Likewise, Rs658bn out of Rs940bn should have been spent on PSDP projects including dams, roads, and funds for health, education and other sectors. But the overall expenditure was Rs237bn, around Rs421bn short of estimated consumption till the end of 8MFY.

Excluding special areas and MNA schemes, only Rs152bn was spent on infrastructure and development.

The official data showed that excluding SAP, the actual development expenditure by three dozen ministries and divisions in eight months amounted to just Rs154bn against their annual allocation of Rs563bn.

Another Rs30.5bn was spent in the water sector against its annual allocation of Rs110.5bn.

Likewise, Rs44.7bn was spent by the National Highway Authority (NHA) and power companies against their total allocation of Rs212bn, even though substantial foreign exchange inflows had materialised in these two sectors.

The NHA used Rs25bn, or 16pc of its Rs156bn allocation, while power companies consumed Rs20bn, or about 36pc of their Rs55.3bn allocation.

Ironically, the Higher Education Commission could utilise only Rs14.5bn or 24pc of its Rs60bn allocation, while the Ministry of Housing and Works spent Rs8bn or about 20pc of its Rs41bn allocation.

Railways spent around Rs18.8bn against its annual allocation of Rs33bn.

The data showed that the government had authorised the release of Rs508bn till Jan 2024, while no additional amount was released in Feb.

This included Rs372bn for 36 ministries and divisions (including Rs61.3bn for MNAs) and Rs127bn for NHA and power companies.

This will be the third year in a row that the country’s under-funded infrastructure development will remain constrained by drastic cuts even in funds allocated by the parliament.

Last year, the development programme was marred by massive floods. The development projects, as a result, would face serious negative impacts of insufficient funding, thus affecting the standards of living of the people already suffering from record inflationary trends.