Govt raises PSDP to Rs1,030b in next budget

ISLAMABAD: With inclusion of Rs100 billion into development programme as off-budget item to finance projects in public, private partnership (PPP) mode, the government has increased overall size of the Pubic Sector Development Programme (PSDP) at federal level to Rs1,030 billion, including allocation of over Rs190 billion for China Pakistan Economic Corridor (CPEC), in the next budget 2018-19.

Total number of development schemes during the fiscal year 2018-19 would be 1,235 into the fold of PSDP, including 726 ongoing schemes and 509 new schemes.

According to a working paper for the NEC sent out to ministries/divisions reads out on Saturday that in fiscal year 2018-19 new projects costing Rs835 billion will be added in the CPEC and its supporting projects. Alone 31 projects for the development of Gwadar are part of the proposed PSDP for 2018-19 with an estimated cost of Rs137 billion.

In an electioneering year, the National Economic Council (NEC) under the chairmanship of Prime Minister Shahid Khaqan Abbasi on coming Tuesday (April 24) will accord approval of the PSDP at Rs1,030 billion, including Rs825 billion allocation for ministries/divisions against the Ministry of Finance allocated amount of Rs800 billion, Rs105 billion for TDPs, special programmes and Rs100 billion for financing on the PPP mode, but this amount will remain outside the budget.

The working paper for NEC states that a major portion of the federal PSDP to the tune of 63 per cent was earmarked for ongoing projects for the upcoming budget 2018-19. The ministries/divisions and executing agencies would be required to process PC-1 of unapproved projects for approval of the competent forum by August 31, 2018, for efficient utilisation of allocated funds.

It was first time in the country’s history that the government made Rs100 billion as off-budget item in the PPP mode as part of overall national development programme and many termed it as a bid to balloon the development outlay to inflate development and please voters in upcoming elections.

With inclusion of Rs100 billion as off-budget items into overall national development programme, the NEC is going to approve overall size of Rs2043 billion for the next budget including Rs1030 billion as federal PSDP and Rs1,013

billion for provincial annual development programs (ADPs). Out of total proposed size of Rs 825 billion for ministries/divisions and executing agencies, the allocation for infrastructure stands at Rs575 billion or 62 percent by getting major chunk of the PSDP amount in the upcoming budget.

The transport and communication sector obtained allocation of Rs400 billion, power sector Rs80 billion (Rs 157 billion as self finance outside the budget), water sector Rs65 billion or 7 per cent of the total PSDP size and Rs30 billion for physical planning and housing in the next fiscal year. Highest priority has been accorded to the transport and communication sector with an allocation of Rs400 billion, including Rs310 billion for national highways, Rs39 billion for Railways and Rs44 billion for other projects, including Aviation schemes such as Gwadar International Airport.

In the transport sector projects like Multan-Sukkar and Lahore-Abdul Hakeem sections of Lahore-Karachi motorways are at fairly advanced stage of implementation while Thakot-Havalian, dualisation of Yarik-Mughalkot—Zhob Section of N-50, Jagolkot—Skardu road Eastbay Expressway Gwadar and Mirpur-Mangla-Muzzaffarabad-Manshera roads are new flagship projects initiated by the government in its tenure.

The allocation for Railways has been increased from Rs16 billion in 2013 to Rs43 billion in 2018. In 2018-19 the government, despite fiscal difficulties, has financed railways mainline known as ML-1 with modest allocation close to Rs5 billion. To modernise railways infrastructure, new projects, namely establishment of Dry-port near Havalian with total cost of Rs380.8 billion that was part of the CPEC and would be completed till 2023, improvement of infrastructure maintenance services Rs6 billion and acquisition of land for Gwadar connectivity Rs10.7 billion will be initiated during 2018-19.

From 2013-2018, the government earmarked allocation of Rs1500 billion for energy sector that added up 10,000MW electricity to the national grid. Water sector allocation is proposed to be enhanced from Rs36 billion to Rs65 billion during 2018-19. The government has made special allocation to start construction of Basha dam and Mohammand Dam with funding of Rs23 billion and Rs2 billion respectively. Other water sector projects, include 7 new schemes worth of Rs849 billion to be started in FY 2018-19 to conserve and augment the water resources. These new schemes are National Flood Protection Plan-IV, Diamer Basha dam, CRBC 1 st lift cum gravity project DI Khan, Mohammand Dam, Lining of KB Feeder Upper Canal for Water Supply to Karachi City, rehabilitation of Sukkar Barrage (90 per cent cost will be borne by the WB and 10 per cent by the federal government) and construction of Feeding Canal to Manchar Lake to eradicate contamination.

For fast track development of special areas, the government allocated Rs62 billion out of which Rs22 billion for AJK, Rs15 billion for GB and Rs25 billion for Fata.

The National Highway Authority (NHA) has been requested to undertake projects of at least Rs100 billion during 2018-19 on the PPP mode of financing. To assist the private sector, the government would finance the feasibility studies for which Rs5 billion allocations were proposed for the next budget.

In order to keep youth away from undesirable activities, programme to build 100 stadiums all over the country costing Rs2,500 million is proposed to be initiated in consultation with provinces on cost sharing basis of 50:50 percent.

The federal government also proposed 400 vocational training institutes on cost sharing basis with the provinces in order to bridge the gap between demand and supply of manpower required for the CPEC projects.

The government proposed size of Rs135 billion for social sector, including Rs57 billion for education including Higher Education Commission (HEC), Rs37 billion for health and population welfare, Rs5 billion for Pak SDGs community development programme and Rs36 billion for others.

The government has allocated Rs72 billion for special areas, including AJK, Gilgit-Baltistan and Fata for next fiscal year, Rs12 billion for Science and Information Technology, Rs18 billion for governance, Rs8 billion for Erra and Rs5 billion for production.

For TDPs and security enhancement managed by the Finance Division, the allocated amount stands at Rs105 billion for the upcoming budget.