Islamabad:
Prime Minister Shehbaz Sharif has set up yet another committee, this time to end an inter-ministerial row as neither the Planning Ministry nor the Finance Ministry is willing to take ownership of 100 provincial nature schemes at a cumulative cost of Rs 573 billion.
The controversy arose days before the approval of the 2024-25 development budget by the National Economic Council, the constitutional body responsible for approving development schemes and including them in the national development agenda.
Sources told The Express Tribune that Prime Minister Sharif formed the committee after the planning ministry thrice rejected a proposal by the finance ministry to take charge of provincial nature schemes. The committee was given 10 days to find a solution to the dispute.
The prime minister appointed Ahad Khan Cheema, a trusted bureaucrat-turned-politician and the federal minister for economic affairs, as the committee’s chairman. Members of the committee include Secretary Finance, Imdad Ullah Bosal, and Secretary Planning, Awai Manzur Sumra.
This is the second committee constituted by the Prime Minister to deal with issues related to the development budget for the next financial year. Earlier, he formed a committee under Planning Minister Ahsan Iqbal to finalize the funding block for the next financial year, now estimated at around Rs 1 trillion.
The sources said that the Chief Minister set up this committee after identifying differences between the two key ministries during the budgeting process.
Due to political considerations, various successive governments have started over 100 projects in different provinces, Azad Jammu & Kashmir and Gilgit Baltistan. These projects, funded by the federal government, are implemented by provincial and territorial governments.
Currently, around 100 projects worth Rs 573 billion are under the Public Sector Development Program (PSDP). As of June last year, Rs 124 billion was spent on these projects. For the current financial year, Rs 168 billion had been allocated, but the entire amount has not been released, leaving significant funding requirements.
The sources revealed that the Finance Ministry has proposed to remove these 100 projects from its domain and transfer them to the Planning Ministry.
Due to severe budgetary constraints, the government has started excluding projects of a provincial nature from the PSDP. If the row between the ministries continues, it could undermine funding for the next fiscal year, the sources said. However, the Ministry of Planning has committed to maintain these projects as part of the PSDP to ensure the Rs 124 billion already spent since June last year.
The finance ministry believes that these projects are included in the PSDP by the planning ministry after approval by the Central Development Working Group (CDWP) and the National Economic Council (NEC).
The Ministry of Finance asserts that the Business Regulation, 1973 entrusts the formulation of an Annual Development Plan to the Ministry of Planning, which has the necessary institutional arrangement for all stages. Bringing these projects under the Finance Directorate deviates from the 1973 Business Rules and creates operational issues in terms of disbursement, accounting, reconciliation and reporting to legislative review forums, thereby compromising efficiency.
However, the Ministry of Planning maintains that the reflection of these allocations under the Finance Directorate’s requirement ensures seamless and immediate intergovernmental transfer and release of development grants to regional and provincial governments, in line with the Finance Directorate’s liberalization strategy. The Provincial Finance Wing in the Finance Directorate facilitates and processes the intergovernmental transfer of funds, a mechanism absent in the Ministry of Planning.
The planning ministry aims to reduce the number of provincial projects in next year’s PSDA and is not in favor of taking responsibility, sources said.
Former prime minister Anwaarul Haq Kakar led the NEC in January this year, urging the provinces to take responsibility for 75 new projects to ease the centre’s financial burden of Rs 200 billion. The NEC then decided that the federal government would not implement all provincial projects with zero economic progress.
Published in The Express Tribune, May 21St2024.
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