THE pace of development spending in Khyber Pakhtunkhwa is erratic and not moving as fast as envisaged by the PTI’s ‘promised change.’ And the unutilised funds — cash surplus — help the federal government to keep national consolidated fiscal deficit close to set targets for the last three years.
The official data reveals that during the fiscal year 2013-14, the provincial government had spent Rs81bn or 68pc on development against its budgetary allocation of Rs118bn. In the following year, Rs113bn or 81pc of the earmarked Rs140bn was utilised.
And in the fiscal 2015-16 about to end on June 30, the KP government could so far utilise only Rs108bn (62pc) out of Rs174bn allocated for the Annual Development Plan (ADP).
The authorities blame the late transfer of funds by the federal government for the under-spending in the third consecutive year. However, over projections ignoring the low resource base, lack of capacity and unforeseen problems are some of the reasons for under-utilisation of the earmarked funds.
Over-projections ignoring the low resource base, lack of capacity and unforeseen problems are some of the reasons for under-utilisation of earmarked development funds
Currently, there are 1,553 projects under implementation. Of these, 915 are on-going projects worth Rs76bn. In all, 638 new projects worth Rs66bn were initiated in the current fiscal year. The provincial planning department claims that 401 projects are expected to be completed by end of June.
The social sector received higher allocation this year: Rs23.2bn for the education sector and Rs8.2bn for the health sector, but non-development expenditures have consumed a large part of it.
The financial release of Rs29.4bn to the newly-installed district governments from the total allocation of Rs42bn, however, is an improvement. Another allocation of Rs17bn has also been made for the local governments and elected Nazims are entitled to spend these amounts on schemes in their respective districts.
Some of the major ongoing projects in the province are Gomal Zam Dam, computerisation of land revenue record and ongoing water schemes.
In the ADP 2015-16, a sum of Rs3.2bn was allocated for the industrial sector. This included establishment of a technology university and support to the industrial zones. But the utilisation is far below expectations. An amount of Rs13.5bn was allocated for the construction of roads mainly in the rural areas but the progress on work is still not clear.
The PTI-led coalition government’s dependence on foreign aid for its development outlay is increasing. For FY15, it had projected external funds at Rs39.75bn, up from Rs21.06bn in FY14. The actual spending was Rs23bn or 57pc.
An official of the provincial government said quite often the central government releases funds to KP towards the fag end of the fiscal year, which mostly lapse.
Meanwhile, seasonal factors are also responsible for the delays. In over 10 districts, development work cannot be carried out from September to March because of snowfall and excessive rains. Development activities only pick up momentum between March and June.
The official listed some procedural hurdles that ultimately cause significant cost overruns in the execution of projects.
For instance, the approval of a PC-1 takes around eight months to a year if the federal government’s approval is required.
While the provincial development budget has increased over time, the limited capacity of the implementation agencies needs to be improved.
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