Devolution leaves education, health ministries with zero allocation in PSDP

Devolution of the education and health ministries has implied zero allocation under the Public Sector Development Programme (PSDP) in the budget for fiscal year 2011-12; however, total allocation under current expenditure remained static at two percent in 2010-11 and 2011-12.
The budget 2011-12 allocated a whopping Rs 39 billion for education under current expenditure which is 811 million rupees less than the revised estimates for 2010-11 and five billion rupees more than in the budget for 2010-11. Allocation under Public Sector Development Programme (PSDP) was zero in 2011-12. Health allocation has been slashed dramatically from 7.4 billion rupees in 2010-11 to 2.6 billion rupees in 2011-12 under current expenditure and zero allocation under PSDP.
Devolution, sources revealed to Business Recorder, has implied zero outlay under PSDP but allocation under current expenditure continues. The provinces have neither the capacity nor the resources to complete ongoing federal projects in all the ministries scheduled for devolution effective 30 June 2011.
The decision to devolve Education Ministry has left a number of projects in the doldrums besides pending liabilities worth Rs 819 million, sources told Business Recorder. Out of a total of Rs 980 million allocated for the said projects only Rs 160 million has been paid by the federal government.
Well-placed sources stated that after devolution almost 32 on-going projects of the Ministry of Education would come to a halt because provinces do not have the necessary capacity or the resources to complete these projects. No provision has been made to pay the remaining dues of contractors engaged in these projects. Sources revealed that it would take at least 7-8 months before all the stakeholders, including the provinces, could agree on the future of the ongoing projects. The federal budget has not made any allocation for ongoing projects under the Public Sector Development Programme in the education sector.
When asked if the contractors could take the federal government to a court for non-payment of their dues, sources said that if the projects are complete then the contractors can get their outstanding dues but if they (contractors) failed to complete the project within the given time frame then they will have no case. However sources added that the federal government invariably takes the plea that the contractors failed to complete the project on time and hence they were not liable to be paid.
Informed sources revealed to Business Recorder that there is a real concern that subsequent to devolution actual outlay on health and education as a percentage of GDP would decline from 1.3percent to 1 percent due to lower outlay by provinces.
"Even the higher authorities of Ministry of Education were not consulted when the devolution process was initiated", sources further revealed. "On April 4, a meeting was called by the Planning Commission to discuss affairs related to devolution of different ministries but right after the meeting, the PC said that 'it is not the right forum to undertake the final decision. However, the very next day a notification was issued early morning to Ministry of Education that said 'the government has decided to devolve the ministry of education," sources disclosed.
Among mega projects, the project of 'Basic Education Community School', 'Establishment of Home Economics and Management Sciences' and 'Education Sector Reform' programmes would be affected. A sum of Rs 7 billion was allocated Under Basic Education Community Schools Programme and at the time of wrapping up of the project, Rs 3.5 billion had already been spent on the project, leaving the project in the doldrums. Similarly, 'Education Sectors Reforms Programmes, implemented in KPK, Balochistan, Sindh, AJK and Gilgit-Baltistan, costing a total Rs 7 billion maybe abandoned.
There are still pending liabilities of Rs 120 million of KPK and Rs 80 million of Gilgit Baltistan and the contractors are running from pillar to post to get their dues cleared. Likewise, the project of Establishment of Home Economics and Management Sciences has also come to a standstill. The total cost of the project was Rs 480 million while Rs 121 million were spent to acquire land and construction of building. There are still Rs 10 million pending and no one knows who will pay for the project, sources said.
The federal government has allocated Rs 39.5 billion for education sector for financial year 2011-12. Sindh kept education on its priority as the current education budget, including technical education, has increased from Rs 22.8 billion to Rs 26.2 billion.
The Punjab government allocated around Rs 23.9 billion for the education sector of the province, including school education, higher education, special education and literacy and non-formal basic education. Balochistan government has allocated Rs 19.256 billion for education sector in its annual budget for fiscal year 2011-12, encompassing an 11 percent rise.
Khyber Pakhtunkhwa (KPK) province allocated Rs 13.12 billion jointly for education and health sectors. The AJK government earmarked Rs 11.083 billion for education sector in the financial year 2011-12. The federal government allocated Rs 18.41 billion for health sector projects in the federal budget for 2011-12. The Punjab government has proposed allocation of Rs 48.8 billion for the health sector for the fiscal year 2011-12. KPK allocated over Rs 5 billion for the health sector. Balochistan allocated Rs 8.869 billion for health affairs and services.