In total disregard for the evolving flood catastrophe, the government has included four dozen new projects worth Rs78 billion in the Public Sector Development Programme (PSDP) seemingly to appease the coalition partners and diverted Rs23 billion to finance these schemes.
The PML-N-led coalition government rushed through the approval process — a prerequisite to release funds for these 47 schemes — after the bureaucracy at the planning and development ministry refused to give funds in the absence of regulatory cover.
This comes at a time when floods have caused an estimated $11 billion to over $12 billion losses to the economy, including infrastructure.
The government has secured the approval of the majority of the members of the National Economic Council (NEC) through circulation of a summary last month and is now in the process of printing a new PSDP book, according to the sources and official documents.
Read: 160 new schemes added to PSDP despite dearth of resources
“The Prime Minister/Chairman National Economic Council has been pleased to approve the proposal contained in para 6 of the summary of the Cabinet Division dated 12 August, 2022 read with para 7 of the summary dated 25th July, 2022, submitted by Ministry of Planning, Development & Special Initiatives titled Final PSDP 2022-23 in Light of NEC directions", the documents read.The NEC — the constitutional body having mandate to approve national economic and development framework — gave its stamp of approval through a circular few days ago, but without discussing the schemes in a regular meeting.
The Cabinet Division and the planning ministry had moved the summaries for the NEC approval to add 47 new schemes costing Rs77.7 billion, the documents showed.
Through the summary, the government also got the endorsement of the NEC to divert Rs22.8 billion from the already approved allocations to fund these projects.
The approval of these 47 schemes could not be secured at the time of the printing of the PSDP Book 2022-23.
The Ministry of Finance has also not included these 47 schemes in the demands for grants budget book 2022-23, according to the sources.The NEC approval was also necessitated after Prime Minister Shehbaz Sharif had refused to give anticipatory approval to include these schemes in the PSDP document as chairman of the NEC.
Also read: Govt plans Rs800b PSDP
The decision has been made despite the finance ministry's assurances to the IMF that it would save Rs150 billion against the already low allocation of Rs727 billion for the PSDP 2022-23.Moreover, the planning ministry has also begun an exercise to divert money from the ongoing projects to finance some of the reconstruction activities in the flood-affected areas.
Due to scarcity of the resources, the finance ministry has already capped the spending to just one-tenth or Rs73 billion for the July-September quarter of this fiscal year as against the annual allocation of Rs727 billion.
The 47 schemes are over and above 68 projects that the PML-N-led government had included in the new PSDP at the time of the budget. After the inclusion of these schemes, the number of total projects to be funded from the PSDP have grown to 1178, excluding self-financed schemes by the Ministry of Energy and its attached departments.
The planning inistry’s version could not be obtained before the filing of the story.The prime minister also instructed the planning ministry that that “allocations for the projects identified by the provincial governments of Sindh and Balochistan shall be accommodated to the maximum extent possible”.After the decision, the Ministry of Planning is now in a process to print a new PSDP book aimed at reflecting the wishes of its coalition partners.
The details showed that majority of these projects are related to construction of roads. Some of the schemes are as small as serving just one community, which should have excluded them from the purview of the national development budget. Others are related to university campus and hospitals.
The newly added schemes are in districts of Nawabshah, Sanghar, Chillas, Behawalpur, Basima, Washuk, Jhal Magsi Chagi, Lasbella, Khuzdar, Quetta, the constituency of NA-268 from where BNP’s Muhammad Hashim Notezai had been elected.
The schemes for Gujrat, Laki Marwat, Killa Abdullah, Pishin, Nushik and Kalat have also been included.The NEC on June 8th had approved the PSDP 2022-23, which is now being amended.
An official of the planning ministry said that the NEC had then directed that demands of provinces and special areas may be considered within the approved size of PSDP.
He said that the PSDP 2022-23 was printed and submitted to the National Assembly and Finance Division for submission as demands for grants for approval along with Budget 2022-23 which was announced on June 10 and subsequently Finance Bill 2022-23 was passed by the NA, including demand for grants for development budget on June 29.
The planning ministry official said that most of unapproved projects were processed and got approved. He said that the allocations of projects, were adjusted within the overall size of PSDP 2022-23. Similarly, the demands of provinces and Special Areas were accommodated to the extent of available fiscal space.
After the NEC’s approval through circulation, the approval of the technical supplementary grants will be secured to divert about Rs22.8 billion funds from the existing PSDP to finance these politically-motivated schemes.