IN the backdrop of consistent reports about low utilization of the PSDP funds, Prime Minister Imran Khan held a meeting on Friday to discuss ways and means to ensure their effective utilization.
The meeting was informed that the government has formulated a comprehensive strategy to monitor the pace of development works and the effective and efficient use of funds after a 40 percent increase in the amount allocated for development projects in the current financial year.
It is rightly said that PSDP is an important public intervention to spur private investment by way of developing human capital and improving the infrastructure.
Economically viable PSDP financed projects help boost economic growth by bridging infrastructure and skill gaps.
However, developmental allocations face two serious challenges – non-utilization of the funds due to red-tape and capacity issues and diversion of funds for other sectors during the course of the year.
This has been happening for a long time and the incumbent Government has not been able to address the challenge despite the fact that Prime Minister Imran Khan had emphasized the need for ensuring optimal and timely utilization of the funds under PSDP back in 2019.
According to latest reports, the utilization of funds under the PSDP at federal level was pathetic as it stood at just Rs421 billion as of June 1, 2021 against the total allocation of Rs650 billion for the outgoing fiscal year ending on June 30, 2021.
Almost the same was the situation in Punjab and Sindh with serious consequences for socio-economic progress of the country.
The concern of the Prime Minister about non-utilization of development funds is understandable as the Government has entered into the last two years of its tenure and it will have to resolve problems of the people and meet their aspirations.
However, the goal of proper utilization of the funds would remain elusive until and unless all sponsoring and executing agencies prepare projects meticulously with focus on time-bound implementation and penalties for any lapse.
The tendency of sitting over funds during the entire year and making efforts for their utilization during June in a haphazard manner also needs to be curbed as it just amounts to wastage of tax money.
NAB interventions are also stated to be one of the major reasons behind slow utilization of development funds and, therefore, an early solution of the problem is need of the hour.