Government withdraws 250 million rupees grant for infrastructure

Islamabad:

The federal government on Wednesday reversed its decision to give a quarter of a billion rupees to a private foundation for an infrastructure project, which it had earlier allocated in a non-transparent manner using inflation-biting taxpayers’ money.

The government had allocated funds for the Noorani Foundation (TNF) without setting any criteria and despite the fact that the social sector was not the responsibility of the center under the constitution.

Last month, the Finance Ministry approved a grant of Rs 250 million for the Noorani Foundation to construct a school building.

The funding was approved under grant number 45, which is intended for subsidies and miscellaneous expenditures of the federal government.

However, on Wednesday, the government decided to roll back the decision, saving taxpayers Rs 250 million.

“The government has reversed the decision to release funds for the Noorani Foundation,” Finance Ministry spokesman Kumar Abbasi told The Express Tribune.

In order to cater to the private sector, the finance ministry created a new category in the budget and tasked the Accountant General of Pakistan Revenue (AGPR) to create a new vendor number in public accounts to facilitate payment.

The finance ministry spokesman said that 250 million rupees had been earmarked in the 2024-2025 financial year budget for the Noorani Foundation to build a boarding school in Swabi.

He pointed out that the 2019 Public Finance Management Act authorized the ministry to give the grant.

The federal government may sanction grant to individual, public or private institutes, local bodies and other non-political institutions and associations as it may deem fit in such manner as may be prescribed, Qumar said.

Responding to a question on whether the special treatment was given to other private organisations, the spokesperson pointed out that the grant was also extended to Girl Scouts and Guides Associations, Iqbal Academy of Pakistan, Al-Shifa Eye Trust Rawalpindi and Fatimid Foundation Karachi.

In the current financial year, the grant has been allocated to the Pakistan Foundation to Fight Blindness, Cadet Hassan Abdal College and Nazriya Pakistan Council Trust, Qumar said.

The spokesman added that Rs 250 million had been earmarked for the general public good to provide educational services in Swabi, a relatively less developed region.

All these allocations fall largely in the health and education sectors, the government’s priority in social sector spending.

However, according to the constitution, the social sector is not the responsibility of the cash-strapped federal government. Only provincial governments can provide such grants in the social sector.

The spokesman said the Treasury had yet to release the financial allocation for the Noornai Foundation and the decision “has now been reversed”.

However, the finance ministry’s earlier decision to allocate Rs 250 million for a matter outside its purview and for a private body raises a question mark over the efficient use of taxpayers’ money.

The salaried class is forced to pay up to 39% of their gross earnings in taxes.

Sources said the finance ministry did not set any criteria for awarding money to a private organization. The money was disbursed without approval from any federal government entity such as the Central Development Working Group.

There are thousands of charities working in Pakistan, but their administrators run them by seeking donations from wealthy private organizations and individuals. It is rare that taxpayer money is given to a private infrastructure project.

TNF version

“Since raising funds in Khyber-Pakhtunkhwa has proved difficult, the Noorani Foundation has asked the government for a one-time grant to build the school,” said Ali Ahmed, a spokesperson for the foundation. He said the government has sanctioned 250 million rupees.

The cost of the school in Swabi is estimated at Rs 600 million, compared to a similar school in the government sector, say, Danish Rs 5 billion, Ahmed said.

The spokesperson added that the commitment of a significant part of the remaining funds has been arranged by other donors and the construction of the school is expected to start soon.

Ahmed said the one-time government grant has not yet been received by the foundation.

He further said that Rashid Mehmood Welfare Organization, after seeing the school in Faisalabad, offered land to the foundation for a similar school in their socio-economic union in Swabi.