ISLAMABAD: With a possible cut of over 50 percent in the development budget in the proposed revised framework, the Ministry of Planning has moved a summary to the prime minister for protecting the...
ISLAMABAD: With a possible cut of over 50 percent in the development budget in the proposed revised framework, the Ministry of Planning has moved a summary to the prime minister for protecting the allocated amount of Rs727 billion for development outlay.
The prime minister has also been requested to jack up the release of funds under the Public Sector Development Program (PSDP) up to 50 percent upfront in the second quarter so that the pace of development work could be accelerated in post-flood requirements.
In a bid to strike a staff level agreement with the IMF for completion of the pending 9th review, the Ministry of Finance has revised the macroeconomic/fiscal framework for 2022-23 and shared with the Fund staff under which the PSDP allocation was proposed to be cut down from Rs727 billion to Rs350 billion for the current fiscal year 2022-23.
Now the Ministry of Planning, Development & Special Initiatives has sent out a summary to Prime Minister Shehbaz Sharif for protecting the allocated amount of Rs727 billion for the current fiscal year 2022-23.
The summary argues that public investment is a pre-requisite to jump-start contracted economic activities in the post-flood scenario. The PSDP was approved with a total size of Rs727 billion, including foreign aid of Rs60 billion. The National Economic Council (NEC) approved Rs73 billion for the Public Private Partnership (PPP) for the current fiscal year.
A top official of the Planning Ministry told this reporter in background discussions that the Ministry of Finance had issued directives for the release of a development budget of 20 percent for quarter 1, 25% for Quarter 2, 30% for Quarter 3, and 25% for Quarter four.
The Finance Division brought changes in the released strategy of PSDP funding in September 2022 and slashed down quarterly ceiling according to which it was envisaged that only 10 percent of funds would be released for the first quarter, 20 percent for quarter two, 30 percent for quarter three and 40 percent for quarter fourth of the current fiscal year.
Now the government has approved the authorization of jacked-up Rs87 billion allocations for the Sustainable Development Goals (SDGs) Achievement Program executed through the parliamentarians for the current fiscal year. Initially, the allocation of the controversial SDGs Achievement Program was jacked up from Rs68 billion to Rs82 billion which was further increased to Rs87 billion.
However, official sources said the funds allocated for ministries/divisions were further curtailed and released funds stood at just 20 percent against the revised indicated limit of 30 percent in the second quarter of the current fiscal year.
The official said that the Ministry of Finance released 50 percent of funds out of the total allocated amount in the first half of the last financial year 2021-22. Now the ministries/divisions and attached departments are asking the Planning Ministry to release the required funds in order to avoid the cost and time overrun of certain development projects.
Keeping in view all pressing requirements, the Ministry of Planning has desired PM Shehbaz Sharif to protect the PSDP funding at Rs727 billion, release funds up to 50 percent in the first half (July-December) period of the current fiscal year, and even consider a reasonable increase in the size of development budget in order to spur growth during the current fiscal year.