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Finance Ministry follows interim arrangement for resource allocation in absence of latest poverty estimates

Finance Ministry follows interim arrangement for resource allocation in absence of latest poverty estimates

ISLAMABAD: In the wake of absence of last poverty estimates, the Finance Ministry has been following an interim arrangement for resource allocation and distribution.

The previous poverty estimates were published in official reports like Pakistan Millennium Development Goals Report 2013, Pakistan Economic Survey 2013-14 and Annual Plan 2014-15.

“This interim arrangement is based on historical basis as per standard Annual Budgeting activity” a well placed source at Finance Ministry told this scribe here adding that a Technical Group on Poverty was reviewing poverty estimation methodology adopted by the government.

As per Fiscal Responsibility and Debt Limitation Act (2005) makes it mandatory for the Finance Ministry to keep poverty and social sector expenditures at not less than 4.5% of the GDP in any fiscal year, therefore resource distribution to different pro-poor sectors has been made on the basis of previous available data.

Similarly, PRSP Secretariat is mandated with tracking the budgetary expenditures for 17 pro-poor sectors identified under the Poverty Reduction Strategy Paper (PRSP-II), however, present government has taken various steps for poverty alleviation in the country.

The Finance Ministry has taken numerous steps to alleviate poverty in the Country including increasing the allocation of Cash Support Programme as Rs. 40.00 billion were spent under Benazir Income Support Programme (BISP) when the present government inherited this programme and enhanced allocation to Rs.75.00 billion in 2013-14.

Subsequently in 2014-15 government designed ‘National Income Support Programme’ (NISP) which includes BISP and Prime Minister’s Youth Programme (PMYP). Allocation was further enhanced to Rs.118 billion (Rs.97 billion for BISP and Rs.21 billion for PMYP).

Moreover, disbursement to each beneficiary under BISP has also been enhanced from Rs. 1,200 to Rs. 1,500 per month. The number of beneficiaries targeted for the current Financial Year is 5.3 million.

Furthermore, the Pakistan Poverty Alleviation Fund (PPAF) was set up under section 42 of the Companies Ordinance, 1984 as a ‘not for profit’ institution in 1997 to reduce poverty at the grass root level. For the current Financial Year, an amount of Rs.2.00 billion has been allocated to PPAF.

An amount of Rs 2.00 billion has been allocated for Pakistan Bait-ul-Mal to undertake different programmes for the poor and the disadvantaged in the current Financial Year.

The Finance Ministry has also initiated some new Initiatives and programmes for which a provision of Rs. 21 billion has been kept in the current Financial Year:

Under Prime Minister’s Youth Business Loans Scheme the scheme, loans ranging from Rs 0.1 million to Rs. 2 million are provided. Mark-up at the rate of 8% is paid by the beneficiary while the remaining cost is to be borne by the Government.

National Bank of Pakistan (NBP) has received 59,794 applications out of which 15,311 loans have been approved as per laid down criteria. An amount of Rs.3.914 billion has been disbursed, while 13,982 loans are under process.

In addition, the First Women Bank Limited (FWBL) has received 459 applications out of which 155 loans have been approved through which an amount of Rs.118.430 million has been disbursed and 95 loans are under process.

While under Prime Minister’s Youth Skills Development Scheme, 25,000 youth up to the age of 25 with minimum qualification of middle will be imparted six-month training in a number of trades across the country.

The average annual tuition fee to be financed under the scheme is Rs. 40,000.The tuition fee of the program selected by the scholarship holder will be financed under this scheme and paid directly to the relevant university.