The Shahbaz Sharif-run provincial government presented their eighth consecutive budget over the weekend. The developmental aspirations couldn’t be higher. At Rs400 billion, the Annual Development Plan (ADP) for financial year 2015-16 is the Punjab’s largest-ever. The outlay rivals actual federal government PSDP spending this year (Rs426 billion as of June 5).
Some observers argue that it’s pointless to analyse lofty allocations when there is notable under-utilization of development funds year after year. But there is value in knowing how the provinces’ priorities are evolving, years after the gavel of social sector development was passed onto them in the Eighteenth Constitutional Amendment (April 2010). So, let’s see how the land of five rivers may be developing next year.
Punjab plans to spend 28 percent of its overall Rs1.44 trillion FY16 expenditures on development projects. That ratio is higher than the FY15 budget estimate (26%), FY15 revised estimate (24%), and FY14 actual spending (21%). Within Rs400 billion ADP, “infrastructure development” takes a 40 percent cut, followed by 30 percent share for “social sector”. Numerical outlays are provided in the pie-chart.
This piece is concerned with infrastructure development. A scrutiny of the budget documents shows that infrastructure development outlays may be higher. As the illustration shows, there are projects, significantly infrastructural in nature, which have been clubbed in other categories. Taking them into account, outlays on brick and mortar development may be as high as Rs220 billion, or 55 percent of the FY16 ADP.
Allocations within infrastructure development follow the Shahbaz administration’s usual script. Building roads and underpasses/flyovers – which the government hopes will stimulate industrial production and trade – takes the biggest slice (Rs69.4 bn). Regular road schemes would get Rs16.4 billion, whereas various phases of the Khadam-e-Punjab Rural Roads Program (KPRRP) would get a massive fiscal injection (Rs52 bn).
For regular schemes, the FY16 road-construction focus would be on inner-city road networks, circumferential roads (e.g. Lahore Ring Road southern loop), inter-city arteries and carriageways, and the 2014 flood-damaged roads. Road schemes start from Murree in northern Punjab and extend all the way down to Rahim Yar Khan in southern Punjab.
The KPRRP schemes would connect villages across Punjab with nearby cities and towns. One must point out that most of the schemes under KPRRP have been going on for years. It is perhaps smart optics to categorize them under the separate banner of “rural roads”, which helps dampen the criticism that road-building is concentrated in urban Punjab. Under KPRRP, southern Punjab districts figure prominently, too.
More road-related outlays are found in the “Transportation” category. Bulk of the Rs28 billion allocated under this head has been earmarked for two mass transit schemes: a metro bus system for Multan (Rs17 bn) and the Orange Line metro train project for Lahore (Rs10 bn).
“Irrigation” schemes, which take the second place in the infrastructure development, would be focused on better lining and rehabilitation of major canals, construction of a small dams, flood protection and hill-torrent management. The government is targeting next fiscal to supply irrigated water to 10 million acres of farmland, line 600 kilometers of irrigation channels, and complete ongoing civil works on various barrages and drain systems.
In the “Energy” sector, a block allocation of Rs15 billion has been made for Bhikki, Sheikhupura re-gasified LNG power project. Projects receiving major funding include Rs4 billion for small coal-based power plants in four Punjab districts, Rs2.5 billion for 2x55MW coal-based power plants, one each at industrial estates of Lahore and Faisalabad, and Rs3.5 billion for a Renewable Energy Development Investment Program.
Allocations for “Urban Development” – mostly for roads, water & sanitation, and housing – would mostly go to metropolitan development agencies in major Punjab cities such as Lahore, Rawalpindi, Multan, Faisalabad, Gujranwala and Bahawalpur. For “Public Buildings”, Punjab government will construct residential and office premises for public sector organizations, judicial institutions and law-enforcement authorities.
So, for FY16, too, the Punjab government’s mainstay is more on building physical infrastructure. Of course, one cannot have a beef with developing infrastructure in a province that has a population greater than Germany, Europe’s most populous country, and a land area comparable to the United Kingdom. A closer scrutiny is needed whether this is duly complemented with required investments in human capital.

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