Financial position of Punjab stabilizes

Financial position of Punjab stabilizes

Lahore: (Wednesday, January 04, 2012) despite considerable spending of around 145 billion on development projects, Punjab’s financial position has stabilized during the past one year.

The province had been under pressure since 2009 when its overdraft from State Bank of Pakistan reached Rs 51 billion, which reduced the pace of development. It gradually improved with the prudent management of the province’s financial
mangers.

Punjab has converted this OD into loan out of which Rs 30 billion have also been retired by the end of December 2011. With the policies of the Punjab financial management, year 2011 become good for the province as after June 2011, Punjab started it every month
with a minimum surplus of Rs 8 billion.

It had started July 2011 with Rs 24.5 billion cash balance opening while closed December 2011 with Rs 12 billion cash balance. Improvement in cash balance position has also created fiscal space for Punjab to bring back the province on the track to development.

During the first six months of 2011 (January-June), which were part of fiscal year 2010-11, the government spending on development project stood at Rs 96 billion. The total development spending of Punjab during the last fiscal year, 2010-11, was Rs 117 billion.
Thus, the Punjab government has spent only Rs 21 billion in the last six months of calendar year 2010 and boosted its development spending since January 2010.

The pace of development spending continued as till June 2011, it spent Rs 96 billion and in the later six months, July-December 2011, it spend approximately Rs 50 billion. The second half of calendar year falls in the fiscal year 2011-12 in which the pace of
spending was much improved compared to the corresponding period last year. The total development spending in July-December 2011 is almost Rs 50 billion, which was more than double of the last six months of 2010 of Rs 21 billion only.

The total annual development plan for fiscal year of Punjab is Rs 195 billon out of which Rs 50 billion were already spend in the first six months.

Thus, Rs 145 billion ADP programme was yet to materialize in the first six months of calendar year. If the precedent of this fiscal year continued then approximately Rs 200 billion would be spent on development projects in the province in 2012, which will be
helpful for the Punjab government in general election campaign. As much as Rs 145 billion allocated amount of development project has yet to be utilized while the provincial government will likely make over Rs 200 billion annual development plan for the fiscal
year 2012-13, out of which almost Rs 50 to 60 billion would be spent in the first six months of fiscal year (July-December 2012), which brings the total development spending of Punjab before election year to around Rs 200 billion.

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Posted by Fayyaz Yaseen on Jan 4 2012. Filed under Pakistan. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry