Surrendering unutilized resources
The provincial governments have surrendered a surplus of Rs.202 to the center during the first quarter of current financial year. Under the 7th National Finance Commission Award of 2010, the share of revenues of federating units from federal divisible pool had been enhanced from 49 percent to 57 percent. However, due to capacity issues of government departments the available financial resources could not be fully utilized. In the current fiscal year too provincial governments could spend Rs.70 billion on development projects. Moreover, there were reports of misappropriation of development funds at large scale in the provinces of Sindh and Baluchistan.
The International Monetary Fund (IMF) had expressed reservation about the transfer of massive financial resources to federating units and confronting the center with liquidity crunch. PPP leadership used to lambast the federal government for agreeing to the multilateral donor agency cogent argument about the refund of unspent cash to the center. However, there is no denying the bitter fact that provincial governments could not spent the increased financial resources on the schemes of people’s uplift. Healthcare system is not satisfactory and education is in shambles. Every year hardly 20 to 30 percent of budgetary allocations are spent on development schemes, causing cost escalations. The capacity building of provincial government department is inevitable as non-utilization of development funds impact the living standards of people in addition to ensuring the judicious spending of available financial resources.