Govt plans to cut PSDP by Rs380bln, shelve 400 unapproved schemes

ISLAMABAD: The government is planning to abolish over 400 unapproved schemes, and also slash the current fiscal year’s Public Sector Development Program (PSDP) to Rs600-Rs650 billion from Rs1,030 billion, sources said on Tuesday.

Prime Minister Imran Khan has asked the Planning Commission to present the revised PSDP document before the Parliament in the next few days for approval.

The Ministry of Finance would propose slashing down the development budget, as all budgetary targets would be revised in a major way to bring down the budget deficit, which peaked to Rs2,260 billon or 6.6 percent of GDP in the last fiscal ended June 30, 2018.

In the PSDP for 2018-19 approved by the National Economic Council (NEC) during the last Pakistan Muslim League-Nawaz (PML-N) led regime, the Planning Commission inserted around 400 to 450 unapproved schemes as part of the PSDP.

It was argued at that time that with approval of NEC it was made part of rules in 2004 that no projects would be approved without securing its resources, after which the Planning Commission used to entertain PC-1 of only those projects which were already made part of the PSDP list.

In a unique but rare episode, it was admitted at the highest levels that there was difference between Finance Ministry’s allocated amount for PSDP in pink book and green book of PSDP published by the Planning Commission.

The Finance Ministry mentioned allocation of Rs800 billion in the Pink Book of Budget for 2018/19, but the Planning Ministry showed allocation of Rs1,030 billion in the Green Book of PSDP. “Now the allocation amount will be further slashed down into fresh PSDP and it will stand at Rs600 to Rs650 billion maximum,” added the sources.

The development schemes of National Highway Authority (NHA) would be abolished in a big way. The exact list was under preparation, and would be forwarded to the PM office in the next couple of days, the sources said.

“The Planning Ministry is working on various scenarios, but the government may cut down the list of PSDP projects, where the spending stood at less than 20 percent,” sources informed. There was also a proposal under consideration to bring down the number of infrastructure projects, and insert some projects related to the social sector, as well as vocational training and capacity building.

“The Planning Commission has kick-started exercise to make fresh PSDP in consultations with chiefs of respective wings and line ministries. It was decided that all unapproved projects will be considered critically and then detailed working will be tabled before the federal minister for planning and federal cabinet for slashing down number of projects as well as allocated amount,” sources said.

There are 38 projects being executed by the Planning Ministry itself, and all kinds of projects were made part of its domain so there was need to abolish all such unnecessary projects which did not make any sense to insert into the domain of the Planning Commission.

“We need to slash down the PSDP list from over 1,200 projects to 500 to 600 important projects in areas of water sector, human resource development, and social sector,” the official said.

The centre should also abandon projects of provincial nature in the aftermath of the 18th Constitutional Amendments and NFC Award “because the provinces possessed sufficient fiscal resources to execute projects from their own kitty instead of relying upon the centre,” the official added.