Ministry of Planning, Development and Reforms has released3 only Rs 167 billion for development spending during the first six months of the current year against Rs 540 billion approved for the year by a meeting of National Economic Council (NEC), which was held under the chairmanship of prime minister Nawaz Sharif. Planning Commission spokesperson Asif Sheikh revealed that only Rs 425 billion was allocated (not disbursed) by the Finance Ministry for PSDP 2013-14 instead of the budgeted Rs 540 billion.
He further told Business Recorder that the Finance Ministry has not allocated any amount under the budgeted Rs 115 billion for new development initiatives, adding that “we have ensured that the demands of all the Ministries and Divisions are processed and released in a timely manner from the allocated funds”. The spokesperson also maintained that Ministry of Planning is on target in terms of PSDP releases as per it laid down procedure that 20 per cent of the total allocation be made in each quarter of the first half of the current fiscal year and 30 each in the remaining half.
The spokesperson further revealed that the release was around 3 billion short of the target: the Planning Commission should have released Rs 170 billion under the PSDP till end December 2013 but was able to release Rs 167 billion. The second Letter of Intent dated 5 December 2013 submitted by the government to the International Monetary Fund under the $6.4 billion Extended Fund Facility commits to scale down the budgeted increase in funds for development and delay some remaining capital spending until revenues from Gas Infrastructure Development Cess materialise.
The IMF mission chief Jeffery Franks in an exclusive telephonic interview with Business Recorder from Washington DC stated that “spending is at a lower level during the first half of the current fiscal year but it is still substantially higher than last year. This means smaller increase in development spending in first half then we will step up in the next half year.”
The government was unable to collect GIDC during the first six months of the current fiscal year because of a court ordered suspension. The court has recently ruled in favour of the government and GIDC collection has begun. “We will recover GIDC for the last six months from the concerned gas companies as their gas sales were being assessed for the suspended period,” a Finance Ministry official told Business Recorder. Total GIDC collection is estimated at around Rs 120 billion for the current fiscal year after an increase in gas prices from 1 January 2014 with the commitment to the IMF to mobilise 0.4 per cent of GDP. Sources added that GIDC collection stood at Rs 50 billion for 2012-13 and Rs 35 billion in 2011-12.
The GIDC was imposed on all the gas consumers except domestic consumers in January 2011 with the purpose of developing infrastructure gas pipeline projects – Iran-Pakistan (IP), Turkmenistan-Afghanistan-Pakistan-India (TAPI), LPG, and Liquefied Natural Gas (LNG).
Out of a total of Rs 166.97 billion released by the Ministry of Planning for various development projects under PSDP, Rs 33.3billion including Rs 15.35 billion foreign aid component was released for various projects of Pakistan Atomic Energy Commission against total allocation of Rs 52.3 billion for current financial year.
The Commission also released Rs 11.45 billion including a Rs 367 million foreign aid component for Railways Division out of its total annual allocation of Rs 30.965 billion, whereas Rs 20.03 billion has been released for National Highway Authority out of total allocation of Rs 63.038 billion for the current fiscal year.
According to the data, the Commission released Rs 32.14 billion for WAPDA (Power) out of its total annual allocation of Rs 51.543 billion whereas Rs 16.23 billion has been provided to Wapda (Water Sector) out of its total allocation of Rs 57.840 billion. The Commission has also released Rs 4.54 billion for Earthquake Reconstruction and Rehabilitation Authority (ERRA) out of a total annual allocation of Rs 10 billion for the current year.
Author: Naveed butt & Zaheer Abbasi
Source: Business Recorder