GB development suffers amid delay in transfer of federal funds

A simple procedure regarding transfer of development funds from the Center to GilgitBaltistan takes up to 40 days mainly due to unnecessary and lengthy procedures being followed for decades.

The above came to light during a recent meeting among officials of the Ministry of Planning, Development and Special Initiatives (PD&SI), Ministry of Finance, Ministry of Kashmir Affairs and Gilgit Baltistan (KA&GB) and the GB government. The meeting was held on the request of GB to simplify the funds transfer procedure.

It may be noted that the lengthy process regarding the release of funds is only specific to GB, as all other provinces, including Azad Jammu and Kashmir (AJK), are being facilitated with fast-track procedures for funds transfer. As per documents available with this scribe, it takes only 10 days to transfer funds to the accounts of AJK from the Center once a release request is made.

"As per the existing procedure, the AJK government directly sends [funds] release request to the Planning Commission, which completes the entire necessary paperwork with the Ministry of Finance and State Bank of Pakistan (SBP) within 10 days," an official explained. "But for GB, the regional government needs to first make a release request to KA&GB, which forwards the same to the Planning Commission. PC then sends authorization letters back to KA&GB and the latter sends a sanction letter to the Accountant General Office in Gilgit since the ministry cannot directly send the letter to SBP. The AG office in Gilgit, after due process, sends a credit request letter to SBP."

According to documents, in case of GB, the KA&GB ministry takes at least two weeks to issue a release sanction letter, apart from the time involved at the Planning Commission. Similarly, the Gilgit AG Office takes a minimum of 10 days to issue a credit request to SBP. The involvement of KA&GB in case of GB delays the disbursement of project funds by around 35 to 40 days.

Although both GB and AJK fall under the ministry of KA&GB, but the lengthy procedure was being followed only for GB. Keeping in view the unnecessary delay in transfer of funds, the GB government had requested the Center to release development funds as per the AJK model so as to enable the GB government fast track development portfolio.

It is pertinent to mention that the delay was being seen only in the transfer of development funds, whereas non-development funds (block allocation) of GB were already being transferred through the Finance Division without the involvement of KA&GB.

On the request of the GB government, the Planning Commission had asked the concerned ministries to consider the request of GB and ensure fast track disbursement of funds of PSDP-funded GB portfolio projects.

According to an official, after some earlier meetings on the subject, a meeting on February 24, 2021, was held at KA&GB to discuss the issue. However, surprising to officials of PD&SI, the Ministry of Finance and KA&GB secretary Ejaz Ahmed Khan out rightly denied to go for the proposed AJK model for transfer of development funds to GB, saying his ministry was the sponsoring agency. He even hinted at rolling back the easy procedure of transferring funds to AJK as both GB and AJK fall under the domain of his ministry. He also reportedly made excuses of capacity issues in GB for following the AJK model.