ISLAMABAD: The federal government, owing to financial constraints, did not release any funds to nine major programmes, including the Export Investment Development Fund, SME Development Support Fund and Venture Capital Fund, in the first quarter of the current fiscal year.
The government had allocated Rs10 billion in the budget for fiscal year 2009-10 for the Export Investment Development Fund to finance initiatives for exports enhancement, but no amount was released in the first quarter for this programme.
The other programmes which did not receive any funding during July-September 2009 include Rs2.5 billion for SME Development Support Fund, Venture Capital Fund with an allocation of Rs2.5 billion, Crop Insurance Scheme with an allocation of Rs2 billion to protect the farming community against losses due to unforeseen events, like pest attacks and floods.
The government had decided to increase its equity in the House Building Finance Company Limited and had made an allocation of Rs2 billion in the budget, while the Zarai Taraqiati Bank Limited Relief Packages were initiated to provide relief to the farming community of up to Rs1.2 billion.
An allocation of Rs2.2 billion was made to write off the previous agriculture loans in Swat, Bajaur and Buner, but no amount was released in the first quarter.
Moreover, the National Internship Programme was to be financed with an allocation of Rs3.6, while Rs1 billion was allocated for Re-construction of Afghanistan.
An official of the finance ministry said that these initiatives were to be financed through grants to the relevant ministries, but negligible allocations were made due to heavy expenditure and high fiscal deficit in the first quarter.
‘The target of the fiscal deficit as reached under the agreement with the IMF is 1.2 per cent of the GDP, but we reached 1.5 per cent in the first quarter,’ the official said.
The official said that total grants to the ministries in the federal budget amount to Rs313 billion; however Rs80.5 billion were released during the first quarter.
The official said that spending is made on priorities and grants would be released to other sectors accordingly.
The official further said that in the first quarter, the government released funds for eight initiatives that include Kashmir Rs2.2 billion, Railways Rs4.5 billion, Bait-ul-Maal Rs200 million, Benazir Income Support Programme Rs10.4 billion, Pakistan Poverty Alleviation Fund Rs300 million, contingent liabilities for law and order Rs49.9 billion, relief to Internally Displaced persons (IDPs), and reconstruction and security Rs9.7 billion and miscellaneous Rs3.3 billion.
The officials said that the economy is already over-burdened and it has to achieve the fiscal deficit target of 1.2 per cent in the second quarter also.
‘The 1.2 per cent of the GDP in one quarter amounts to around Rs170 billion,’ sources said and added that the government has already reached Rs160 billion, while the daily operational expenses of the federal government are between Rs5 billion and Rs6 billion.
‘Due to higher expenditure, the fiscal deficit between October - December 2009 is likely to be around Rs220 billion,’ sources said.
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