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Govt sanctions just 16.7% of annual budget in first quarter for development projects

Published: October 3, 2017


ISLAMABAD: Barring a few projects of the China-Pakistan Economic Corridor (CPEC) and the ones coveted by the ruling party, the overall pace of spending on development schemes remained slow in the first quarter, as the federal government sanctioned Rs169.2 billion or 16.7% of the annual budget.

However, two new special initiatives of former prime minister Nawaz Sharif – Clean Drinking Water for All and Energy for All – did not receive a penny against their combined annual allocations of Rs24.3 billion. These initiatives had been announced a month before Sharif was ousted by the Supreme Court.

The government also did not authorise any spending for another special initiative worth Rs34 billion – the Special Federal Development Programme, which had been conceived to uplift underdeveloped areas of the country.

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The planning ministry has released the latest data of the budget sanctioned for development spending from July through September of this fiscal year. Official statistics show that the fund released were Rs31 billion less than the limits prescribed by the finance ministry.

The ways and means limits prescribed by the finance ministry allow the planning ministry to authorise up to 20% of the total annual spending during the first quarter. While keeping in mind upcoming general elections and the growing requirements of CPEC projects, the federal government has allocated Rs1.001 trillion for Public Sector Development Programme for fiscal year 2017-18.

However, at the start of the new fiscal year, the finance ministry had relaxed the 20% condition for the fast moving projects aimed at facilitating the schemes that the incumbent government wants to complete before the next general elections.

Due to its political priorities, the federal government has included 420 new projects in this fiscal year’s PSDP despite 582 ongoing projects being pending. The federally-funded PSDP was comprised of 1,022 projects and out of these 420 were new schemes.


Out of Rs866 billion allocation for total 1,022 projects for current fiscal year, a sum of Rs536 billion was allocated to ongoing schemes and Rs149 billion for new schemes.

During the first quarter, the planning ministry has sanctioned Rs14.25 billion for the under-construction Lahore-Sialkot motorway project, which is equal to its annual allocation. Similarly, Rs1.5 billion has been authorised for spending on roads connecting Islamabad city with New Islamabad International Airport. The releases were equal to 30% of annual allocation for the project.

The Lahore Eastern Bypass project received Rs2.5 billion during the first quarter, which was 31.2% of its annual allocation. The expansion of Thokar Niazbeg Lahore project received Rs4 billion during first three months of the fiscal year, which was equal to 80% of its annual allocation.

Similarly, the government released Rs10 billion for Lahore-Abdulhakeem section of CPEC project of eastern corridor, which was equal to 21.2% of its annual allocation. Compared to this, the dualisation of Yarik-Moghalkot section of western route of the CPEC got Rs800 million or 16% of its annual allocation. Another project of improvement of Jaglot-Skardu western route project received Rs864.1 million or 12.3% of its annual allocation.

The National Highway Authority (NHA) received Rs56 billion or 17.2% of its annual budget of Rs325.7 billion. The NHA alone got a lion’s share of 33.1% of the total releases of Rs169.2 billion during the first quarter.

The government also sanctioned Rs30 billion for the parliamentarians schemes – 100% of the annual budget. However, its onward distribution is decided by the Cabinet Division, depending upon the progress and the political clout of a parliamentarian.

The huge allocations for infrastructure schemes have been made at the expense of projects being initiated by other government ministries. For instances, the Ministry of National Health Services received only Rs1.7 billion or 3.5% of its annual budget of Rs48.7 billion.

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Overall, the government sanctioned only Rs39 billion for hundreds of developments schemes carried out by 39 government ministries. The amounts were just 12.7% of their combined annual allocations of Rs306.6 billion.

A significant chunk of Rs7.4 billion out of Rs39 billion went to water resources ministry, Higher Education Commission Rs6.5 billion or 18.2% of its total budget and railways ministry Rs8.6 billion.

The Special Federal Development Programme for Temporarily Displaced Persons received Rs14.6 billion or 16.2% of its annual allocation during the first quarter. This head technically does not fall under the category of development spending.

Published in The Express Tribune, October 3rd, 2017.

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