Govt lags in using development funds
Taxpayers allocating a proportion of their income for their country expect to see the results of their contribution in the form of some development work implemented by the government to improve the quality of life of people in the country. In Sindh, however, development is reduced to a buzzword, with the majority of funds underutilized even as the year ends.
With only weeks remaining before the books close, several provincial departments are still issuing tenders for new development schemes, according to sources. In the first week of May alone, the Highways Division of the Sindh government invited tenders for more than 200 projects, including the construction of 125 roads in Umarkot, setting up of a paver block in Larkana alongside the installation of 77 CC drains.
It should be noted that the current financial year will end on June 30th and work on the projects will start only in the next financial year. This is because even after these tenders are floated, contracts take time to be awarded and work to begin-making the timely completion of projects within the year a pipe dream. While development funds are often released in scattered tranches, non-development allocations tend to be readily spent.
According to figures obtained from the Finance Department, by the first week of May, Rs1,477 billion out of Rs1,925 billion allocated for non-developmental expenditures, had been released to provincial departments, which ended up spending 88 per cent of this amount. On the contrary, out of the Rs959 billion budget allocated to provincial departments for development projects, Rs571 billion was released, of which only 69 per cent was utilized.
An official from the Finance Department, speaking on the condition of anonymity, confirmed that provincial departments spent a large chunk of the development budget on ongoing schemes, while very little was spent on new schemes. "Since there is no need to complete new formalities for ongoing schemes, it is easy for departments to spend money on existing projects. However, it is difficult to spend on new development schemes since it takes a long time for them to complete all the formalities," explained the official.
Dr Kaiser Bengali, a renowned economist, highlighted various technical reasons behind the underutilization of development funds. "Funds are allocated in the budget for new development projects, but the financial year is spent completing their formalities. Any new development project has to go through various stages from approval and preparation of PC-1 to the release of funds. This process often takes a long time hence its implementation is delayed. The relevant institutions of the provincial government should include in the budget only those development schemes for which PC-1 has already been prepared. This will reduce the amount of time taken to implement them," opined Dr Bengali.
The problem of timely utilization of funds is not limited to the funds allocated by the provincial government since the allocation received by the Sindh government from the federal government too is not utilized in a timely manner. This can be gauged from a report published by the Auditor General of Pakistan regarding the non-utilization of Zakat funds.
Every year, the federal government distributes the funds collected in the form of Zakat to all the provinces, which are obliged to spend this money on the deserving people. With this money, financial assistance must be provided to the impoverished households in the provinces by giving them subsistence allowances. This amount should also be spent on the welfare of orphans, treatment of poor patients and scholarships for underprivileged students at universities.
According to the report, the federal government provided Rs4.63 billion as Zakat to Sindh during the financial year 2021-22. However, despite the passage of a whole year, the provincial government spent only Rs850 million on public welfare.
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