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Budget 2011: Finance Department balks at development ambitions
The political leaders and financial managers of the Punjab are at odds over the funds for the Annual Development Programme (ADP) 2011-12. The former want to announce a development plan to dwarf the previous years, while the latter is pleading to cut down its size on account of the resources availability.
The political leadership wants to announce a Rs200 billion ADP, compared to Rs193.5 billion announced for the last financial year. The Finance Department, however, is advocating an ADP no larger than Rs145 billion.
An official told The Tribune that the Finance Department had told the chief minister that the treasury was under tremendous pressure due to scarcity of funds, low recoveries, huge raises in salaries and large expenditures.
The Punjab government had constituted a working group, headed by former finance minister Muhammad Ishaq Dar, to make recommendations on the size and resources of the next ADP.
This year, the government was forced to slash development funding by Rs65.5 billion over poor financial discipline, scarcity of funds, revenue collection shortfalls and several subsidy schemes.
In the upcoming ADP, Rs128 billion has been set aside for ongoing projects and Rs65.5 billion requested for new schemes.
Equitable growth, poverty reduction, employment generation, social sector development and ensuring food, potable water and energy security are the stated focus of the development strategy.
An official involved in the budget process said that close to 85 per cent of the province's resource depend on federal transfers.
The Punjab government was facing a shortfall in the revenue collection from indigenous resources.
The political governments, he said, always wanted large ADPs but resource estimate seldom support the desired volumes. The ADP should match the resources and should not be more than Rs145 billion, he said.
The Finance Department released Rs125 billion to the executing departments and agencies after 'rightsizing' the current ADP but the utilisation reported so far remains only Rs54 billion, which is nearly 40 per cent of the released amount. He believed that the spending shortfall was owed to a lack of capacity, fear of accountability in case of irregular spending and laziness of the field officers in the executing departments and agencies.
The Punjab government, he said, would not support an increase in the salaries of government officials in the upcoming budget as last year's raises had put a heavy burden on the public kitty.