February, 22, 2024
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PM Urges Provinces: NEC Funding Decisions

PM Urges Provinces: NEC Funding Decisions

Infostani International: PM Anwaarul Haq Kakar has urged provinces to take on 75 projects to ease the federal government’s Rs200 billion financial burden. Despite reservations, the National Economic Council (NEC) recently made key decisions regarding project transfers and funding priorities for the upcoming fiscal year. Here’s a concise overview of the discussions and outcomes from the NEC meeting.


PM Urges Provinces: Handover of 75 Projects Sparks Concerns

On Monday, PM Anwaarul Haq Kakar urged the provinces to take responsibility for 75 projects, aiming to relieve the center from a financial burden of Rs200 billion. The federating units expressed reservations about the mandate of an interim government making such decisions.

The federal government will retain ownership of 282 provincial-nature projects, requiring an additional Rs800 billion to complete, with Rs366 billion already spent. At a National Economic Council (NEC) meeting, the interim prime minister chaired discussions attended by three provincial chief ministers, except for Punjab.

The NEC directed provinces to take over 68 projects, saving Rs202 billion, including Rs112 billion in the current fiscal year. Sindh and Khyber-Pakhtunkhwa (K-P) chief ministers questioned the caretaker government’s mandate for long-term financial decisions, citing Section 230 of the Election Act, limiting the caretaker government’s role.

NEC Approves Fiscal Guidelines: Funding Shifts and Savings in Key Projects

The NEC approved guidelines for the fiscal year 2024-25 development budget, prohibiting allocations for provincial-nature projects and placing a moratorium on projects with operational and maintenance costs.

The PM Office announced NEC approval of the Special Investment Facilitation Council (SIFC) recommendations for the closure and transfer of federal-funded provincial projects. The NEC endorsed all but two education-sector projects.

During the meeting, the interim PM raised concerns about the financial integrity of officials involved in project processing and fund allocation. Despite provincial reservations, the PM, as NEC chairman, decided not to implement all provincial projects with zero financial progress.

  • NEC allocates funds, redirects savings, and caps initiatives
  • Also resolves federal-provincial funding disputes for ongoing projects
PM Urges Provinces: NEC Funding Decisions
NEC approved allocations of Rs32.5 billion for 68 projects and a total cost of Rs118 billion

Allocations of Rs32.5 billion for 68 projects, with a total cost of Rs118 billion, were approved by the NEC. The remaining Rs28.8 billion from the Rs90 billion annual allocation for parliamentarians’ schemes in the current fiscal year would not be released. Savings of Rs28.8 billion would be redirected to other crucial projects, especially those with additional foreign components. The spending under the PM’s initiatives would be capped, saving another Rs53 billion.

To prevent the wastage of invested funds due to potential legal and contractual issues, it was decided that the federal government would complete 282 ongoing projects. Balochistan favored continuing federal funding for all ongoing projects, while K-P insisted on elected government decisions for closure and project transfers.

Sindh Resists Transfers: NEC Shifts Funding Focus for Key Sectors

Sindh opposed project transfers, except for parliamentarians’ schemes. The SIFC and the federal government argued that, due to the federal government’s shrinking fiscal space, resources needed to be freed up for critical needs by limiting federal funding for provincial projects.

The NEC approved new guidelines for the inclusion of projects and allocations under the Public Sector Development Programme (PSDP) 2024-25, emphasizing funding priority for strategic and core ongoing projects in water resources, transport, railways, communications, and energy sectors. During FY 2024-25, projects with over 80% expenditure were prioritized across all sectors for completion.