BUDGET 2024-25: Power, defence and election expenses overshoot allocations

ISLAMABAD: At least 38 government departments exceeded the amounts allocated to them during the fiscal year 2023-24, receiving additional funds through supplementary and technical grants, details of current expenditure released by the Finance Division for the outgoing fiscal year show.

Apart from debt servicing (both local and foreign), the Power Division was the biggest spender, utilising Rs769.7 billion against an allocation of around Rs450.5bn. Consequently, it needed an additional sum of around Rs319.1bn to meet its expenses during FY2023-24.

The same was the case with the defence sector. Under the Defence Services head, the government had allocated Rs1.8tr, but expenditure ballooned to Rs1.835tr, posting an increase of Rs31.5bn due to overspending in almost all heads, such as “operating expenses”, “physical assets” and “civil works”.

Meanwhile, the Defence Division required an injection of Rs20bn under the head of ‘transfers’ against its allocated budget of Rs6bn.

Spending on Elections was a massive expense as well, given that FY24 was an election year. But against an allocation of Rs7.7bn, overall expenditure listed under this head was over Rs39bn, mainly due to the Feb 8 general elections and subsequent by-polls.

38 govt departments ‘overspent’ a total of Rs454.1bn; three dozen divisions reported combined ‘savings’ of Rs446bn

On the other hand, the Planning, Development, and Special Initiatives required Rs13.9bn more than its yearly allocation of Rs8bn for the outgoing financial year. The increase was attributed to a rise in spending under the head of “grants, subsidies, and write-off loans”.

The IT and Telecom Division also remained among big spenders, requiring Rs10bn more to meet expenses largely attributed to ‘grants, subsidies, and write-off loans’ head, from the government to meet its expenses against the allocation of Rs9bn.

In all, the total amount overspent by government departments amounted to around Rs454.1bn. This was just under the figure of Rs446bn, which is the total sum ‘saved’ by around three dozen departments and divisions, meaning that overall, the government overshot its expenses by around Rs8bn.

This means that these departments did not fully utilise the funds allotted to them, for any number of reasons. For example, the finance ministry saved Rs441bn under the “subsidies and miscellaneous expenditure” head.

Money saved this way is usually diverted to another needy head or ministry, which is facing a paucity of funds, through technical supplementary grants approved by the ECC or the cabinet, which are eventually okayed by parliament as supplementary demands for grants.

Meanwhile, just over two dozen departments of the federal government remained within their means, i.e. utilised all of their budgetary allocations.

The finance ministry, as mentioned earlier, saved a substantial chunk of money against its allocation of a little over Rs1.5tr, while its expenses barely exceeded Rs1.1tr.

The Finance Division itself saved about Rs925m from its Rs4.2bn budget, owing to a reduction in operating expenses and physical assets.

Similarly, the premier social welfare programme, the Benazir Inc­o­me Support Programme could not utilise around Rs450bn of its Rs471bn allocation, as it managed to significantly reduce its expenses under the head of ‘employee-related expenditures’.

In the Establishment Division, Rs612m out of its Rs8.2bn budget remained unutilised as it reduced operating expenses, among other heads.

Meanwhile, the Naya Pakistan Housing Authority, which was allocated Rs1bn, could only spend Rs536m, with an almost Rs450m ‘saving’. The judiciary also contributed to the savings regime, with the Supreme Court, Islamabad High Court and Islamabad district judiciary registering a combined saving of around Rs0.5bn.