The federal government on Monday approved Rs10 billion supplementary budget for politically motivated schemes amid disclosure that nearly Rs38 billion or 82% of the already approved funds for this fiscal year have been doled out to only two provinces.

The Economic Coordination Committee (ECC) of the Cabinet enhanced the allocations for the parliamentarians’ schemes to Rs56 billion within five months of the approval of the original budget of Rs46 billion.

The ECC also approved nearly Rs135 billion to clear dues of the independent power producers under a deal.

Federal Minister for Economic Affairs Omar Ayub briefly chaired the ECC meeting, endorsing the decisions taken by Finance Minister Shaukat Tarin – led subcommittee under a new political arrangement.

The Rs10 billion additional budget has been given in the name of ‘Sustainable Development Goals Achievement Programme (SAP)’, which had been initiated in the name of under-privileged areas. The money is being distributed by a Steering Committee on SDGs headed by Defence Minister Pervez Khattak.

The projects are approved without being endorsed by forums like the Central Development Working Party and the Executive Committee of the National Economic Council.

However, a fund that is mainly meant for the poorest areas is largely distributed in Punjab and Khyber-Pakhtunkhwa, which are relatively better than Balochistan – the most under-nourished province of the country.

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In June, the National Assembly had approved Rs46 billion for the parliamentarians’ schemes. The documents showed that more than 82% of the funds were allocated to Punjab and K-P – the two provinces ruled by the ruling Pakistan Tehreek-e-Insaf and are crucial battlefields to win the National Assembly in the upcoming general elections.

The official record showed that the federal government handed over Rs24.4 billion to the Punjab government, which is equal to 53% of the original budget. Similarly, the federal government has given Rs13.2 billion to the K-P government, also 29% of the original budget.

Interestingly, Balochistan -the most under-developed province has been given only Rs1.17 billion or 2.6% of the original budget.

An amount of Rs5.7 billion had been allocated for the Sindh province projects but the money has not been handed over to the provincial government. Instead, the funds were released to the Ministry of Housing and Works for spending.

For Islamabad Capital Territory, Rs1.1 billion was given through the Ministry of Interior which is 2.4% of the original budget.

The Rs10 billion additional money has been diverted without parliament’s approval. Parliament’s ex-post facto approval, as per practice, will be taken along with the new fiscal year’s budget, which will deprive the legislature of the scrutiny of expenditures.

Following in the footsteps of its arch rival PML-N, the PTI government had also set up a steering committee for approving development schemes recommended by MNAs for their respective constituencies. In the PML-N’s tenure, this job was performed by the then minister of state for parliamentary affairs, Sheikh Aftab Ahmad.

IPPs payments

An official handout of the economic affairs ministry stated that the ECC also approved Rs134.8 billion for payment to the IPPs as second instatement (60%) as per payment mechanism. The amount will be distributed among the remaining 20 IPPs by December 3, 2021.

Of the 20 IPPs, Hubco power limited and Kapco power limited were set up under pre-1994 IPPs policy.

Six IPPs were under 1994 policy and 12 were related to wind, solar and bagasse.
The government has already given Rs90 billion as first instalment. The decision will help reduce the circular debt by the same amount that has already crossed Rs2.3 trillion.

Hubco will get Rs34.8 billion, Kapco Rs59.4 billion, Rousch Rs8.5 billion; Fauji Power Plant Rs2.6 billion, Pak Gen Power Rs9.8 billion, Lalpir Rs9.3 billion, KEL Rs3 billion, Saba Power Rs1.1 billion and FFC Energy Rs2.1 billion.