Monday July 22, 2024

Rs950bn PSDP proposed for next fiscal year

he Annual Plan Coordination Committee recommended Rs2.659 trillion national development outlay for the next budget 2023-24

By Our Correspondent
June 03, 2023
Minister Ahsan Iqbal while chairing APCC meeting highlighted the Ministrys 5Es strategy (Exports, E_Pakistan, Environment, Energy, Equity) as a guiding principle for development. Twitter/PlanComPakistan
Minister Ahsan Iqbal while chairing APCC meeting highlighted the Ministry's 5Es strategy (Exports, E_Pakistan, Environment, Energy, Equity) as a guiding principle for development. Twitter/PlanComPakistan

ISLAMABAD: The Annual Plan Coordination Committee (APCC) has recommended Rs2.659 trillion national development outlay for the next budget 2023-24 including a federal Public Sector Development Programme (PSDP) of Rs1.1 trillion and a provincial allocation of Rs 1.559 trillion.  

The APCC also proposed to National Economic Council (NEC) a controversial allocation of Sustainable Development Goals Achievement Programme (SAP) for Parliamentarians to the tune of Rs 90 billion for the next budget 2023-24 against the revised allocation of Rs111 billion for the outgoing financial year. The APCC approved and recommended the NEC for National Development Outlay FY 2023-24 at Rs2.659 trillion billion Rs.624 billion as Foreign Aid and including provincial development programmes of Rs1,559 billion. The federal PSDP 2023-24 at Rs700 billion including foreign aid of Rs56 billion besides Rs200 billion as PPP financing.

The APCC also established a new mechanism for provincial nature development projects and placed guidelines under which federal sponsoring agencies and provincial departments should adopt the Assan Assignment Account (AAA) Procedure. The sponsoring/executing agencies should follow NEC-approved policy 2021 regarding compelling provincial nature schemes and should bear at least 50 percent cost of such projects. The Finance Division may devise a flexible release 25 percent for each quarter to ensure sufficient and timely availability of funds. It may provide the foreign exchange component (FEC) cover wherever required and also exempt the development spending from austerity measures like a ban on procurement. It may not deduct/charge the CDL recovery at source from the released funds under PSDP; The Finance Division may not divert development funds to the non-development side during the currency of the fiscal year. It may waive the ban on procurements of machinery and equipment for the development projects; It can consider providing a budget to ERRA for its salaries/operational expenses from the current side of the budget, if any.

The shrinking size of PSDP amid the growing share of provincial nature projects has seriously undermined national infrastructure projects. Therefore, it is imperative that the share of provincial nature projects should be contained to a minimum level so that adequate funding for the timely completion of vital national projects can be ensured and cost overruns be avoided.

Minister for Planning Ahsan Iqbal told journalists in P block (Ministry of Planning) that Prime Minister Shehbaz Sharif directed the Ministry of Finance to jack up PSDP size from Rs700 billion to Rs950 billion for the upcoming budget and Rs150 billion funds for execution of projects under Public Private Partnership (PPP) so total size of the PSDP was proposed to be increased up to Rs1,100 billion. He alleged that the PTI-led regime had brought down the development budget from Rs1 trillion in the fiscal year 2017-18 to Rs0.550 trillion in its last year rule of 2021-22.

He said that the throw forward touched the mark of Rs9 trillion but now the government decided to provide more allocations to those projects on which 70 percent of work was completed. He said that the APCC also granted its nod to the macroeconomic framework including a GDP growth target of 3.5 percent and inflation at an average on 21 percent for the coming budget. He said that now the increased public sector investment would help to turn around the economy. He said that the government also approved 5Es vision including promoting exports, E-Pakistan., environment, energy and equity.

Ahsan Iqbal said that the government would allocate a major chunk of development on those projects which were completed by 70 percent. To another query about the SAP programme and duplication in flood-related projects, he said that the ministries diverted resources towards the SDGs programme instead of surrendering funds. He also promised to take action if found any duplication of flood-related projects. He said that the Ministry of Planning was going to place IT based registry for monitoring purposes. He said that the Ministry of Planning filed a reference where the data of patients collected by the Ministry of IT was being shared with Shaukat Khanum Hospital and it was just the tip of the iceberg of alleged corruption done under the PTI-led regime.

According to the working paper for the APCC, the government proposed a PSDP of Rs700 billion and Rs200 billion for PPP through Viability Gap Fund (VGF) for the next budget. The government has allocated Rs359.4 billion for Infrastructure projects, Rs179.3 billion for the social sector, Rs54.4 billion for special areas including GB and AJK, Rs55 billion for merged districts and zero allocation for Earthquake Reconstruction & Rehabilitation Authority (ERRA).

The priority has been assigned to the Infrastructure sector being the primary responsibility of the federal government with over 50 percent of proposed allocations, followed by Social Sector having 26 percent and Balanced regional development (AJ&K, GB and Merged districts of KP) with 16% of proposed allocations for next Fiscal Year. About 8 percent resources are earmarked for other sectors like IT& Telecom, S&T, governance and production sectors etc.

The Water Resources have been proposed with 13 percent resources. The large multipurpose dams particularly Diamer Bhasha, Momand, Dasu Dams, K-IV etc and drainage projects have been given priority. Whereas, financing of new small dams, and drainage schemes falling in the domain of provinces were discouraged.

Transport and Communications have been proposed 22percent of PSDP: Ongoing mega projects of NHA, Railways, Maritime Affairs, and Defence Production were given due priority for adequate funding. Completion of ongoing projects instead of initiating new schemes has been focused. The CPEC-related projects attached due priority of creating industrial linkages, and promoting trade and commerce in the country Similarly, small road sector projects falling in the domain of provinces were discouraged except those ongoing for timely completion.

The Energy/Power has been proposed 11 percent of allocations. Projects for power evacuation,expansion and improving transmission lines and distribution systems have been given priority to control line losses and circular debt. To operationalize SEZs projects for supply of power are adequately financed. Besides, Power Division invests self-generated resources in the power sector.

In the case of Education / Higher Education sector has been proposed 7 percent of resources. Education is a devolved subject. The federal government, nevertheless, is funding the projects for the improvement of the education system through the development of a uniform curriculum, standard examination system, establishment of smart schools, TVET development etc. To promote higher education, substantial funds have been provided to HEC to meet the challenges of the 21st century for quality higher education in the field of research and emerging technologies.

The health sector is given due impotence though it is a devolved subject. To provide improved health services, prevention and control of communicable diseases, production of medical devices and capacity enhancement of institutions, 3 percent of PSDP resources have been earmarked.