Provinces outpace Centre by allocating Rs263 billion for uplift schemes

ISLAMABAD: Out of total proposed national development outlay of Rs1,763 billion to be presented to Annual Plan Coordination Committee (APCC) meeting scheduled to be held on coming Monday, the provinces have outpaced the Centre by allocating increased resources of Rs263 billion for development schemes in an electioneering year. The federal government has allocated Rs750 billion, including Rs105 billion as bloc allocation for development and provinces earmarked Rs1,013 billion for annual development programmes (ADPs) for the next budget 2018-19. The provinces share on development expenditures outpaced the Centre with massive margin of Rs263 billion, and it’s happening first time in the country’s history mainly thanks to increased share of provinces in the NFC Award and 18th constitutional amendments.

According to APCC working paper available with The News disclosed on Friday that the forum (APCC) would be requested to recommend the National Economic Council (NEC) for consideration and approval of the National Development Outlay at Rs1,763 billion for the Federal Public Sector Development Programme (PSDP) and provincial Annual Development Programme (ADPs) and enhance the size of federal PSDP from Rs750 billion to Rs1,300 billion and macroeconomic framework for 2018-19.

The Finance Division, under Medium Term Budgetary Framework (MTBF), conveyed indicative budget ceiling (IBC) for development budget for 2018-19 at Rs645 billion for ministries/divisions/executing agencies. The working paper for APCC states that since the indicated amount was not sufficient to meet the requirements of funds especially of China Pakistan Economic Corridor (CPEC) projects, some of them awarded on engineering procurements contract (EPC) mode and at advance stage of completion.

The Ministry of Planning, Development & Reforms has received total demand of Rs1,900 billion from line ministries/divisions for ongoing and new projects for PSDP 2018-19. Through consultative meetings, the total demand was rationalised at Rs1,500 billion. The Ministry of Planning approached the Finance Division to enhance the size of development budget to at least Rs1,300 billion so that all the sectors of economy may flourish equally and follow the trajectory of balanced growth.

The Ministry of Planning requested the ministries/divisions to prepare respective development portfolio adhering to guidelines as ongoing projects with 70 per cent expenditures should be fully financed, foreign aided projects should be provided required rupee cover, CPEC projects on EPC should be allocated required funds and security related projects should be allocated demanded funds.

New projects in order of priority and proposed allocation should be at least 25 per cent of the approved cost of the project as per PAC/NEC directions. In any case, allocations to the new projects should not be more than 10 per cent of the IBC allocated/awarded to each ministry/division.

The APCC working paper shows that the national development outlay was slashed down by Rs350 billion as it was proposed at Rs1,763 billion for 2018-19 against Rs2,113 billion for last budget 2017-18 because the Centre was facing acute financial crunch.

The government proposed abolishing of controversial discretionary funding programme on the name of special initiatives of PM’s programmes to the tune of Rs100 billion out of which they used to dole out Rs250 to 300 million to each treasury member of Parliament and more than 90 per cent schemes were executed in Punjab. The federal Public Sector Development Programme (PSDP) for 2018-19 proposed at Rs750 billion, including Rs607 billion as domestic rupee component and Rs145 billion as foreign aid. The provincial annual development outlays (ADPs) proposed at Rs1,013 billion

Of total Rs750 billon allocation for federal PSDP, the government has proposed Rs305 billion for ministries/divisions, including Rs274 billion as rupee component and Rs31 billion as foreign aid, for corporations such as NHA, Wapda and Power Rs266 billion, special areas Rs62ompletion of China Pakistan Economic Corridor (CPEC) Rs5 billion and Ersa Rs7 billion.

The Finance Division proposed bloc allocation of Rs105 billion for three initiatives, including special development programme for TDPs & security arrangement, PM’s initiatives and gas infrastructure development cess (GIDC). Total federal share of development programme stands at Rs750 billion.

For provinces, the total ADPs touched Rs1,013 billion, including Rs865 billion as rupee component and Rs148 billion in shape of foreign aid.