PM forms panel to firm up size of uplift budget

ISLAMABAD: Prime Minister Shehbaz Sharif has constituted a high-powered ministerial committee to finalise the size of the next budget and consider abandoning allocations for provincial nature projects, prioritizing the national development goals.

The ministries of finance and planning disagree over the allocation of Public Sector Development Program (PSDP) in the wake of scarcity of resources in the next financial year.

The finance ministry has so far indicated a PSDP allocation of just Rs750 to Rs800 billion, while the planning ministry is seeking Rs1500 billion to Rs1600 billion to kick-start the sluggish economic activities.

According to an official notification, Prime Minister Shehbaz Sharif had constituted a 10-member high-powered committee under the chairmanship of minister for planning. Interestingly, the secretary of the Planning Division has not been made part of this high-powered committee.

Official sources confirmed to The News on Friday that Premier Shehbaz Sharif recently chaired a meeting and inquired about the implementation status of P3A. He was shocked to know that the PPP initiative had failed to materialize in a big way.

The IMF has identified that the PSDP is unaffordable and should be reassessed. The total cost to complete projects in the PSDP is Rs10.7 trillion, more than 14 times the budget allocation of Rs727 billion in 2022-23. Notwithstanding intentions to prioritize the completion of ongoing projects, new projects with a total cost of Rs2.3 trillion were added by the government in the last budget. In addition, separate preparation and oversight of the current budget and the development budget, by the Finance Division and the Planning Commission respectively can lead to inconsistent and sub-optimal decision-making.

If Pakistan and IMF agree upon a new loan program, the PIMA report along with Climate PIMA might become one of the conditions to implement it in letter and spirit which might tie the hands of the government for inclusion of politically motivated projects into PSDP listsin haste and without doing required spadework.