ISLAMABAD - The government has adopted tight cash release policy for the development projects of the country due to the tight fiscal position and revenue shortfall during six months of the ongoing fiscal year.

The government has released only Rs184.5 billion for the Public Sector Development Programme (PSDP) during almost six months (July to December 21) of the year 2018-19. The government has released only 27 percent of the annual development budget in six months period, according to the data released by the Planning Commission. 

The government has already slashed the development budget to Rs675 billion for the year 2018-19 from the total budgetary allocation of Rs800 billion in order to restrict the budget deficit. However, the government is still releasing the funds at slower pace despite slashing the development budget massively. On the other hand, the Federal Board of Revenue (FBR) is facing massive shortfall in tax collection, which had already gone to Rs100 billion.

The data showed that about Rs76.7 billion have been released by the Planning Commission to all 39 federal ministries and divisions in six months this year. This worked out at 26 percent of Rs291.5 billion annual allocation for these ministries. The data showed the Planning Commission could not release any funds for development of Federally Administered Tribal Areas (FATA). The government had allocated Rs10 billion as federal contribution to 10-year development programme of the region now being merged as districts of the Khyber Pakhtunkhwa provinces.

Meanwhile, the government has released Rs18.5 billion for special areas including Azad Jammu and Kashmir (AJK) and Gilgit-Baltistan (GB). The government has disbursed Rs10.7 billion for AJK in six months as against a total allocation of Rs25.8 billion. Likewise, GB was provided with Rs7.8b this year against an allocation of Rs17.5b. According to the documents, the Planning Commission has released Rs86.9 billion for the National Highway Authority (NHA) and the power sector. The NHA had received Rs81.3 billion under PSDP as against the annual share of Rs185 billion. Similarly, the power sector, NTDC/PEPCO received Rs5.6 billion during the period under review.

On the other hand, the government could release only Rs1.23 billion to three special programmes against a total allocation of Rs78b. These allocations included Rs33.5b each for development for settlement of internally displaced persons and security enhancement, Rs7b for Prime Minister’s Youth Programme and Rs4b for gas infrastructure development. During the same period last year, an amount of Rs45b was disbursed was released to these sectors against a total allocation of Rs135bn.

Under disbursement mechanism approved in consultation with the Ministry of Finance, 20pc allocated funds are required to be released in each of the first two quarters and 30pc each in the third and fourth quarters of the financial year.