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ZAFAR BHUTTA
ISLAMABAD (October 21 2009): Budgetary allocations for the 2009-10 Public Sector Development Programme (PSDP) constituted over-ambitious targets and the government is finding it extremely difficult to meet a mere three-and-a-half months after the budget was announced, well placed sources told Business Recorder on Tuesday.

The Finance Ministry has reportedly pledged to release Rs 130 billion - 30 percent of Rs 421 billion budgetary allocation to ministries/divisions by December 31 for development projects under the 2009-10 PSDP - an assurance extended in a meeting of the first quarter review, aimed at addressing the grievance of the ministries. Sources said that fund releases to the ministries, including Health, Communication, Ports and Shipping, Food and Agriculture, Housing and Industry during the first quarter (July-September 2009), were discussed on Tuesday.

The ministries strongly protested against the reduced release of funds during the first quarter, and claimed that the Finance Ministry released only Rs 54 billion, around 10 percent of their total budgetary allocation for development projects instead of the 20 percent or Rs 107 billion agreed for the first quarter. The Finance Ministry claimed that it released Rs 105 billions against the committed amount of Rs 107 billion during the first quarter.

The sources said that the real picture would emerge after reconciliation of accounts of the ministries with the Finance Ministry. The Finance Ministry released funds to the ministries during the two months of July and August and banned release of funds in September due to poor external cash flow and additional spending on military operations in NWFP against the Taliban. During the meeting, it was noted that the Finance Ministry released rupees two billions to the Health Ministry out of a total budgetary allocation of Rs 23 billions.

The Health Ministry requested the release of additional amount of rupees seven billions to carry out its projects. The Health Ministry officials claimed that the ministry received funds from the Finance Ministry for only seven projects against 46 total ongoing projects. The Ministry of Housing was provided Rs 160 million during the first quarter of current fiscal year while it requested an additional amount of rupees two billions.

The Finance Ministry released rupees eight billions to the Ministry of Communication, which placed a request for additional funds of Rs 15 billion for development projects. The Ministry of Industry was provided Rs 50 millions during the first quarter against it requirement of Rs 1.3 billions.

The Ministry of Ports and Shipping received Rs 16 millions against the requirement of Rs 22 millions in the first quarter. Funds, amounting to rupees one billions, were released to the Ministry of Food and Agriculture (Minfa) against its request of rupees eight billion during the first quarter of the current financial year. The Minfa has requested additional funds of Rs 11 billions for the development projects.

During the first day of the review meeting, it was noted that the government allocated Rs 47.255 billion for 85 development projects in water sector. The Finance Ministry was to release the committed amount of Rs 17.85 billion in the first quarter, but released only Rs 2.8 billion due to financial constraints. The Ministry of Water and Power came up with a request of additional fund of rupees six billions for water sector for timely completion of ongoing mega water projects.

In the 2009-10 PSDP, the government allocated Rs 19.5 billions for 40 developmental schemes of Pakistan Atomic Energy Commission (PAEC). According to rules, the Finance Ministry was to release Rs 6.1 billion in the first quarter of the ongoing fiscal year, but provided only Rs 2.8 billions.

In the annual budget, the government allocated Rs 447.440 millions in the PSDP for five ongoing developmental projects of Pakistan Nuclear Regulatory Authority (PNRA). The Finance Ministry released only Rs 82.5 million against committed amount of Rs 109.8 millions in the first quarter. The Finance Ministry provided Rs 48.5 millions to Ministry of Information Technology and Telecom against the actual commitment of Rs 430.4 million in the first quarter of the current fiscal year.

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