Islamabad:
The Government spent RS905 billion in development schemes in the last fiscal year, which was lower than the allocation and now may require a downward review in the economic growth rate of 2.7% that had been resolved on the basis of RS1.1 billion in expenses.
Of the RS905 billion, a little more than half, or RS456 billion, were spent during the last two months (May-June), also underlining the need to return to visit the current budget strategy that artificially suppresses the expenses.
According to provisional figures, the Federal Government spent RS905 billion under the Public Sector Development Program (PSDP) in fiscal year 2024-25, which ended Monday.
The expense of RS905 billion was lower than the original RS1.4 billion budget approved by the National Assembly for fiscal year 2024-25. However, the Government subsequently reduced the PSDP to RS1.1 billion, but still, the real expense remained lower than the reviewed budget.
During the last fiscal year, the Government had announced an economic growth rate of 2.7%, which was based on the assumption that the RS1.1 Billions of PSDP reviewed down completely.
At a press conference last month, the main statistic of the Pakistan Statistics Office (PBS), Dr. Naeemuz Zafar, confirmed that the GDP figure assumed that the RS1.1 billion be spent.
A PBS official said Wednesday that after the real expense of RS905 billion, there will be some impact on economic growth calculations. He said that the exact impact could not be determined immediately.
Speaking to The Express PAkGazette, Federal Minister of Planning and Development, Ahsan IQbal said: “We had almost touched the RS1 Billion spending brand, but due to the slow approvals of the General Pakistan Accountant (AGPR), the expense remained at RS905 billion.”
The sources said the Ministry of Finance had ordered the Department of AgPR to reduce the speed of the launches during the last days of June to meet the budgetary objectives related to the International Monetary Fund (IMF).
According to the current strategy to release the budget, approximately 40% of the total budget was sanctioned in the last quarter, which often results in lower expenses and can also cause leaks.
A Senate member, who is also in the construction business, told the Express PAkGazette on anonymity that the AGPR did not clarify the checks of the contractors due to the limitations related to the budget.
During the July-April period of the last fiscal year, the Government had spent RS449 billion. But in the last two months, another 456 billion were reserved in development expenses. In June alone, RS308 billion in development expenses were shown.
However, the planning minister said that the development work was not stopped in the third quarter of the last fiscal year and that it was only the money that was released and reserved during May-June.
For the sake of the IMF program, the Ministry of Finance squeezed the PSDP to achieve objectives of quarterly and annual primary surpluses.
A report from the Ministry of Planning published recently declared that the lower expense had impacted projects in several sectors. Despite the thin fiscal space, the government was still adding new projects or reviewing the cost of the schemes already approved.
Important spending heads
According to provisional figures, the Government spent RS60.5 billion in parliamentary schemes in the last fiscal year. The expense was more than the budget reviewed down.
But Iqbal said that after deciding initially reviewing the downward budget, the Government decided to retain the original assignment for the Sustainable Development Goals (SDG) program.
Parliamentary schemes are qualified as SDG initiatives.
Other RS69.5 billion were spent on provincial projects, which are financed by the Federal Government. The financing of the provincial schemes is against the commitments granted to the IMF and the National Fiscal Pact.
Around RS64 billion were spent in which the schemes are executed in the old tribal areas administered by the federal government, now merged with Khyber-Pakhtunkhwa.
Against an allocation to the decline of RS61 billion, the expense in higher education remained at RS58.8 billion. The Pakistan Atomic Energy Commission received its full budget of RS25 billion, but for this fiscal year, the Government has drastically reduced its allocation.
The development expense of the Space and Higher Atmosphere Research Commission (Supparco) remained at RS30.4 billion against the allocation of RS41 billion.
The Government spent RS154 billion on projects of the Ministry of Water Resources, which also include spending on two main dams. The allocation was RS195 billion. For this fiscal year, the government has reduced the allocation of the water sector by 28%.
The highway and road spending under the national road authority amounted to RS144 billion, against the allocation of RS161 billion.
The development expense in projects of the electricity sector was RS88 billion, compared to the allocation of RS98 billion.
