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March 9, 2018

Government lifts ban on re-appropriation of funds for development projects

Business

March 9, 2018

ISLAMABAD: Government has decided to withdraw ban on re-appropriation of funds allocated for development projects, officials said on Thursday, in a move to refocus on the uplifts that need more monetary support ahead of the fiscal yearend.

Officials said government, on the directives of Prime Minister Shahid Khaqan Abbasi, has revisited its policy of slapping ban on re-appropriation of funds and now decided to exclude development projects from the ban.

Officials said diversion of funds from one project to another is considered as a routine exercise and clipping such power was an important step to stop misuse of funds in pre-poll rigging just ahead of the general elections.

Last week, government imposed ban on re-appropriation of funds for the current fiscal year of 2017/18, but the ban was not applicable on constitutional bodies, such as Supreme Court of Pakistan, Auditor General of Pakistan, Federal Ombudsman, Tax Ombudsman, Election Commission of Pakistan and others.

Principal Secretary to Prime Minister Fawad Fawad had floated the idea of ban on re-appropriation of funds on the pretext that why principal accounting officer of each and every ministry did not bother about expenditures heads at the time of budget making exercise and why only in midyear they started running for adjusting expenditures from one head to another on different excuses. The discussion was primarily related to current side of the budget, but finance division imposed ban on all kinds of re-appropriation of funds.

The issue came into the limelight at a meeting of the National Economic Council (NEC), headed by Prime Minister Abbasi last Wednesday, in which Sindh blamed the centre for not providing funds allocated for public sector development program projects. Chief Minister Murad Ali Shah even accused the centre for pursuing Punjab centric policies fueling regional disparities.

On the complaint, Secretary Planning Shoaib Siqdiqui briefly replied that he had held meeting with the top officials of the provincial government and no one had raised any such complaint. It was decided then that the ministry of planning and Sindh government’s officials would sit together and resolve the issue of funding for development projects.

During the heated debate at the meeting, Advisor to Prime Minister on Finance Miftah Ismail told the highest economic decision making forum of the country that the centre collects four trillion rupees a year and out of which Rs2.4 trillion are provided to the provinces as their shares under National Finance Commission award and left with only Rs1.6 trillion.

Debt repayment consumes Rs1.4 trillion, leaving just Rs200 billion. So, the center has to meet expenditures related to defence, development and government affairs. “No option is left but to go for borrowings,” Ismail told the NEC participants.

Planning Commission’s officials told The News that Sindh government surrendered Rs4.2 billion for Karachi Green Bus project in the last budget because they were unable to utilise funds and now they raise complaints at the NEC forum. The federal government, they said, earmarked whole throw forward amount in the current year’s PSDP and allocated Rs13 billion for the project against the demand of Rs12 billion so that the cost escalation could not become a hurdle in the way of completion. Government even earmarked funds for K4 (Karachi water supply and sanitation) project in FY2018 as demanded by Sindh.

Earlier, the Supreme Court of Pakistan had slapped ban on re-appropriation of funds through one of its verdict that created difficulties for the government in couple of years after wining 2013 elections. Then the government had filed review petition and pleaded before the court that the ban on re-appropriation of funds was creating problems for the executive to effectively run the state affairs and sought permission to undertake the exercise.

After witnessing severe difficulties for running the affairs of ministries/divisions during 2014, government had filed a review petition before the Supreme Court of Pakistan and challenged its verdict for imposing ban on appropriation of funds and supplementary grants without seeking prior approval of the parliament.

The apex court, in its order in the suo motu case of diversion of funds by the former prime minister Raja Pervez Ashraf, had directed the government to follow Article 80 to 84 of 1973 constitution related to approving of the budget process by the parliament. Then the government was granted permission with certain pre-requisites and allowed appropriation of funds and use of supplementary grants.

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