Rapid Fund Release for Parliamentarians’ Schemes
The prompt release of 96% of the funds earmarked for parliamentarians’ schemes within the first eight months (July-February) of the current fiscal year has provided a significant boost to an otherwise sluggish development programme.
According to a report by Dawn newspaper, official figures from the Planning Commission reveal that total expenditure under the Public Sector Development Programme (PSDP) stands at Rs 312.3 billion, representing only 28.4% of the Rs 1.1 trillion allocated for the year. In contrast, spending under the Sustainable Development Goals Achievement Programme (SAP), commonly referred to as the parliamentarians’ schemes, has significantly exceeded initial allocations.
Disproportionate Expenditure on Parliamentarians’ Schemes
Expenditure under SAP has reached approximately 140% of the initially allocated Rs 25 billion and nearly 70% of the Rs 51 billion approved later. This sharp contrast is particularly striking given the backdrop of a revenue shortfall of Rs 600 billion over the same period. Meanwhile, utilization of the core PSDP, excluding SAP allocation, remains notably low at just 26% or Rs 277 billion out of Rs 1.05 trillion.
Unlike previous years, where SAP funds were often subject to bureaucratic delays, this year’s distribution has been exceptionally swift. A senior government official noted that the SAP fund was doubled and spent with “Shehbaz speed,” referring to the rapid approval and disbursement of funds.
Accelerated Disbursement Process
The approval to increase the SAP fund to Rs 50.77 billion and allocate it to MPs of coalition partners was given on January 9. Remarkably, 96% of the funds (Rs 48.64 billion) were disbursed within just a few weeks. By the end of February, total utilization of the Core Development Portfolio had reached Rs 35 billion (72%) within two months, while the overall Core Development Portfolio had been utilized at a mere 26% in eight months.
IMF Influence and Government Adjustments
Government officials indicate that the original allocation for SAP was set at Rs 50 billion during the Annual Plan Coordination Committee meeting in April last year. However, this amount was later reduced to Rs 25 billion in the final budget, prepared in consultation with the International Monetary Fund (IMF).
Despite this reduction, a November meeting of coalition parties, chaired by Deputy Prime Minister Ishaq Dar, resulted in the fund being doubled to Rs 50 billion in the 2024-25 budget. The PPP had demanded the release of Rs 30 billion, but Dar rejected this request on technical grounds related to the previous fiscal year.
Additionally, the government relaxed previously notified PSDP norms to facilitate the prompt disbursement of funds. This move coincided with a near 300% increase in MPs’ salaries and the expansion of the federal cabinet.
Regional Allocation of Funds
Out of the Rs 48.37 billion allocated for SAP, Punjab MPs received the largest share at Rs 28.87 billion. Sindh MPs were allocated Rs 15.25 billion, followed by Rs 2.25 billion for Balochistan, Rs 1.25 billion for Khyber Pakhtunkhwa, and Rs 750 million for Islamabad.
In contrast, overall PSDP expenditure for the first eight months of the previous fiscal year was Rs 237 billion, constituting only 25% of the allocated Rs 940 billion.
Structural Weaknesses in Development Spending
According to the Finance Ministry’s fiscal plan, the government is required to release development funds in a structured manner: 15% in the first quarter, 20% in the second quarter, 25% in the third quarter, and the remaining 40% in the final quarter. However, the estimated PSDP utilization by the end of February should have reached at least 52% of the annual allocation (approximately Rs 572 billion), whereas actual spending remained far below this threshold.
Out of the 36 federal ministries, divisions, and their affiliated agencies, only Rs 253 billion of the allocated Rs 843 billion was spent within eight months. Notably, almost half of this amount (Rs 125 billion) was disbursed in January and February.
Sector-Wise Spending Breakdown
- Infrastructure & Energy: The National Highway Authority (NHA) and National Transmission and Dispatch Company (NTDC) collectively spent Rs 59 billion in eight months, just 23% of their combined allocation of Rs 255 billion. Individually, NHA utilized Rs 49 billion against an annual share of Rs 161 billion.
- Energy Sector: Rs 10.6 billion was spent, representing a mere 11% of its Rs 94.5 billion allocation.
- Climate Change Division: Despite increasing vulnerability to climate disasters, the division spent only Rs 478 million, which is approximately 9% of its Rs 5.25 billion allocation.
- National Food Security: Utilization stood at just Rs 1.1 billion, constituting only 4.9% of its contingency fund of Rs 23.9 billion.
- Railways Division: This division achieved an unusually high expenditure rate, spending Rs 21 billion, or roughly 60% of its Rs 35 billion allocation.
- Planning Commission: The very agency responsible for overseeing the development program spent only Rs 2 billion, approximately 15% of its Rs 21.4 billion allocation.
Lack of Development Impact & Accountability
Five federal ministries, including Commerce, Communications, Counter Narcotics, Religious Affairs, and the Strategic Plan Division, did not utilize any funds within the first eight months. This spending pattern raises serious concerns about the effectiveness of government planning and the impact on economic growth and public welfare.
At the provincial and regional levels, the merged districts of Khyber Pakhtunkhwa, Azad Jammu and Kashmir (AJK), and Gilgit-Baltistan collectively spent Rs 79 billion, amounting to only 31% of their Rs 257 billion allocation.
Despite having the largest allocation of Rs 170 billion under PSDP, the Water Resources Division managed to spend only Rs 50 billion, or 29% of its allocation. Similarly, the Higher Education Commission (HEC) used Rs 15 billion out of its Rs 61 billion allocation.
Implications of Fund Mismanagement
The underutilization of development funds is a longstanding issue in Pakistan, often resulting in incomplete projects, delays, and wasted resources. With nearly Rs 1.4 trillion initially earmarked for PSDP, adjustments made under IMF agreements reduced this allocation to Rs 1.1 trillion. While funds for parliamentarians’ schemes were swiftly released, critical sectors such as infrastructure, climate resilience, and food security remain severely underfunded.
This imbalance raises pressing concerns about governance, priority setting, and the impact on the country’s economic and social progress. Moving forward, greater transparency, accountability, and strategic planning will be required to ensure that development funds are utilized effectively to benefit the public rather than being disproportionately directed towards political interests.
