Govt fails to fully utilise rupee component of PSDP

ISLAMABAD: The government has failed to fully utilise the rupee component of its Public Sector Development Programme (PSDP), and its consumption of the funds stood at Rs551.4 billion against an allocated amount of Rs577 billion during fiscal year 2020-21.

Different ministries/divisions and attached departments could not use the whole allocation, and fell short of Rs26.4 billion. This was compensated by foreign aid, as Islamabad received a larger amount. Therefore, the foreign aid was utilised more in order to show utilisation of funds to the tune of Rs650 billion for the last financial year. The utilisation of the whole PSDP amount stood at Rs651.4 billion during fiscal year 2020-21, against allocated funds of Rs650 billion.

However, the Ministry of Planning, Development and Reforms claimed that the PSDP allocated amount of Rs651 billion was fully utilised mainly because the foreign aid component obtained from multilateral and bilateral creditors surpassed the allocated amount. Utilisation of foreign aid stood at Rs100.03 billion against envisaged target of Rs72 billion for the last financial year 2020-21, the ministry said.

It is worth noting that in the first week of June 2021, the National Economic Council (NEC) under Prime Minister Imran Khan’s Chairmanship was told that Rs421 billion were utilised under PSDP at the federal level till June 1, 2021. It should be considered close to a miracle that the remaining allocated amount of Rs229 billion was utilised up to June 30, 2021, which totalled Rs650 billion.

“It demonstrates that the whole utilisation of funds and the adopted process is highly flawed,” said a top government official. He also said that Rs70 billion allocated to respond to Covid-19 were transferred to the provinces with the assignment to utilise the funds till the end of June 2021.

When Secretary Planning Hamed Yaqoob Sheikh was contacted on Monday to inquire about the utilisation of PSDP funding, he said that PSDP utilisation stood at Rs651.47 billion against an allocated amount of Rs650 billion. The utilisation of rupee component stood at Rs551.45 billion against allocation of Rs577 billion, while the utilisation of foreign aid stood at Rs100.03 billion against allocation of Rs72 billion, he added.

Official sources also said that the federal government had accomplished over 200 development projects during the last financial year ended June 30, 2021.

Earlier, the NEC was informed through an official summary in the first week of June 2021 that it was expected that 217 projects costing Rs190 billion were likely to be completed by June 30, 2021.

In the last fiscal year, the government completed the Karachi Nuclear Power Plant Project (KANUPP-2). The government had allocated Rs984 billion for KANUPP-2 and KANUPP-3 units for adding 2,300MW. KANUPP-2 with a capacity for 1,150MW was linked to the national grid in March 2021.

The next phase of KANUPP was under completion and would add another 1,150MW to the system. This project would recover its cost close to rupees one trillion within a nine-year period.