PML-N Government Revives Controversial Development Schemes Despite Revenue Shortfall
ISLAMABAD: As the first year of the PML-N government nears completion, the administration has reintroduced the contentious development schemes for parliamentarians, which were delayed in the early months of the 2024-25 fiscal year due to a revenue shortfall exceeding Rs460 billion.
In a significant move, the government doubled the funding for these “political” projects, officially known as the Sustainable Development Goals Achievement Programme (SAP), increasing the budget from Rs25 billion to nearly Rs50 billion for the current fiscal year.
Additionally, the government rejected a request from coalition partner PPP to carry over approximately Rs30 billion of unspent funds from the previous fiscal year.
To expedite the process, the government relaxed certain principles set for the Public Sector Development Programme (PSDP) to facilitate quicker fund disbursements, aiming to satisfy parliamentarians within the ruling coalition. This comes on the heels of a recent decision to approve a 300% increase in parliamentary salaries.
The task of implementing these schemes, which was previously handled by the Pak Public Works Department (PWD), has now been assigned to the Pakistan Infrastructure Development Company Ltd (PIDCL), part of the housing ministry, following the dissolution of the PWD.
Revalidation of Lapsed Funds
At a recent Steering Committee meeting on SAP, chaired by Deputy Prime Minister Ishaq Dar, it was revealed that Senate Chairman Yousaf Reza Gilani and Deputy Speaker National Assembly Ghulam Mustafa Shah had requested the revalidation of funds that lapsed in the 2023-24 financial year.
The PML-N government had allocated Rs91 billion for parliamentarians’ development schemes in FY 2023-24, of which around Rs61 billion had been approved for disbursement before the caretaker government took office, halting further spending. By the end of the fiscal year, nearly Rs57 billion remained unutilized, with Rs34 billion of this amount being requested for carryover by the PPP officials.
However, Mr. Dar clarified that the Public Finance Management Act 2019 prohibited the revalidation of lapsed funds, preventing approval for the carryover proposal, as noted in official records.
SAP Funds Allocation and Release
During the meeting, Planning Minister Ahsan Iqbal confirmed that Rs50 billion had been allocated for the SAP under the PSDP for FY 2024-25. However, the official PSDP document lists only Rs25 billion for the SAP, without specifying which schemes will be funded.
The steering committee, which includes 27 members—16 parliamentarians, seven federal secretaries, and four provincial representatives—agreed unanimously to authorize the release of Rs48.37 billion for the implementation of SAP projects. The funds will be distributed among federal ministries, divisions, and provincial governments.
Of the total allocation, Rs28.87 billion will be distributed to Punjab-based parliamentarians, followed by Rs15.25 billion for Sindh, Rs2.25 billion for Balochistan, Rs1.25 billion for Khyber Pakhtunkhwa, and Rs750 million for Islamabad.
Since then, the Planning Commission has authorized the disbursement of approximately Rs40 billion for these schemes.
Slow PSDP Spending Despite Higher Allocations
While the government has focused heavily on political development schemes, spending on the core Public Sector Development Programme (PSDP) has remained sluggish. By the end of the first half of the fiscal year, only Rs148 billion had been spent, out of the Rs1.1 trillion allocated for the year, representing a mere 10.45% utilization rate. This is a drop from the same period last year, when the caretaker government spent Rs150 billion, or 16%, of the Rs940 billion PSDP budget.
This indicates that the development programme may struggle to exceed Rs600 billion by the end of the fiscal year, falling short of the budget allocation. According to the Ministry of Finance, the release schedule for the PSDP this year is intended to be 15% in the first quarter, 20% in the second, 25% in the third, and 40% in the final quarter.
However, by the end of December, the government had only spent a fraction of the projected 35% of the annual budget, with actual spending being nearly three times lower than expected.
