1HFY13: PSDP spending exceeds target

The PSDP spending spree, seen during first four months this fiscal, seems to have slowed down lately. While previously it almost looked certain that the Planning & Development division would exhaust over half of its authorised funding limit within 1HFY13, the deceleration in PSDP spending in recent weeks has led to half-yearly disbursements of 43.5 percent against its overall limit of Rs233 billion for FY13.
That figure still exceeds the officially laid down spending threshold of 40 percent of PSDP funds release by the end of December 2012. Latest data released by the Planning Commission shows that the P&D division released Rs101.4 billion for PSDP projects between July 1 and December 28.
The cumulative federal PSDP portfolio for FY13 stands at Rs360 billion – of which Rs233 billion are to be released directly by the P&D to various government divisions and ministries. The official release mechanism necessitated that the Division released 40 percent of that limit in first two quarters, 25 percent in the third quarter, and 35 percent of its mandated funds in the last quarter of FY13.
Rest of the PSDP is composed of the foreign aid inflows budgeted at Rs100 billion, and to be received in the Economic Affairs Division during the year. The EAD data shows that provisional foreign project aid disbursements for PSDP projects stood at 597 million dollars (Rs56.52 billion) during the July-November period.
The last PSDP component is managed by the duo of the cabinet and finance divisions, which are directly releasing Rs27 billion under allocations for the federal government’s ‘Special Programmes’ (PWPs I and II). The PSDP spending by the finance & cabinet divisions has historically been undertaken on a fast track basis, and much of the Rs27 billion under their umbrella is expected to have already been disbursed.
The Planning Commission data shows that during 1HFY13, the leading beneficiaries of PSDP funding included the divisions of Communications (Rs11.42 bn), Kashmir affairs & Gilgit-Baltistan affairs (Rs8.12 bn), HEC (Rs7.89 bn), P&D (Rs7.64 bn, which includes funding for vertical health programmes), PAEC (Rs7.01 bn), Railways (Rs6.63 bn), Housing & Works (Rs5.87 bn), Fata (Rs5.73 bn), and the Finance division (Rs4.33 bn).
During the period, Wapda received Rs21.79 billion for its water sector projects, while it was also provided Rs3.1 billion for the purpose of land acquisition at the construction site of the Diamer Basha Dam.
The federal government is widely expected to release most of the PSDP allocations before the curtains fall on this regime. However, both the quantum and pace of releasing the rest of the PSDP allocations largely depend on how much time the government think it has got, and whether it is viewing to complete its constitutional term.

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Federal PSDP FY13 (Rs bn.)

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              Ongoing     Throw           FY13 budgetary                   FY13

Sector       Projects   Forward            allocations                Releases*

                (No.)    (Cost)  (Govt. Funds)  (Foreign Aid)  (Jul.1 - Dec.28)

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Infrastructure   345    2,346.7        125.6           85.6                55.7

Social           688      549.8        127.4            8.4                42.6

Others            68       40.6            3              0                 1.1

ERRA               -          -            4              6                 2.0

                                       260.0          100.0

Total          1,101    2,937.1        360.0                              101.4

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