PSDP may be jacked up from Rs675 bn to Rs1,000 bn in budget

ISLAMABAD: The Ministry of Planning is all set to ask the government to jack up proposed size of Public Sector Development Programme (PSDP) from Rs675 billion to Rs1,000 billion for the upcoming budget in order to cater requirement on infrastructure front.

“Yes we are going to propose PSDP size at Rs750 billion through national exchequer and also exploring option of earmarking an additional amount of Rs250 billion through public private partnership (PPP) in the next budget, totaling the overall development outlay up to Rs1,000 billion in 2019-20,” top official sources confirmed while talking to The News here on Wednesday.

However, the PPP mode of financing had so far failed to deliver here in our country because the institutional arrangement and lack of capacity of banking and non- banking financing institutions proved major stumbling block in the way for achieving the desired results. The Planning Ministry envisages special programme of over Rs100 for neglected areas of the country, but the scarcity of resources might not give ample fiscal space to the government to undertake any major initiative on development front.

There is need to raise question that the government had envisaged undertaking development projects in shape of PPP mode during the outgoing fiscal year, so how much funds were generated to execute projects through this mechanism. Before envisaging any ambitious plans, the government must put in place the desired institutional arrangement to make PPP mode as successful mode in Pakistan.

“After holding two days’ deliberations with ministries/divisions at Priorities Committee, the Planning Commission has made up its mind to officially communicate to the government to jack up the size of the PSDP up to Rs1,000 billion, including Rs750 billion from national exchequer and Rs250 billion through PPP mode,” one top official said.

Earlier, the Ministry of Finance had indicated indicative budget ceiling of Rs675 billion for the PSDP for next fiscal year against the same amount earmarked for same purpose in the outgoing fiscal year. The Planning Commission is authorised to sanctioning of the PSDP funds, but the Finance Ministry is responsible for actual releasing of development funds. So there is always gap between sanctioned and released amounts.

“The Ministry of Water Resource has sought funding of Rs200 billion for construction of mega dams,” said the official and added that the resource constraints would not allow the government to undertake major initiatives in the coming budget.

Although, the funds allocations were not yet finalised, but the government was considering for making increased allocation for the dam where the construction work has already started so increased allocation would be made for Mohmand dam in this case.

With possibility of entering into fresh arrangement with the IMF for seeking multibillion bailout package, the PTI led government is following pattern of tight fiscal position where the development programme axed massively on name of adjustments to slash down the budget deficit.

With restrictions for inclusion only approved development projects, the government has barred inclusion of all kinds of unapproved projects into the PSDP list. The ministries/divisions were showing lackluster approach and always used pressurising tactics from political elites for inclusion of unapproved projects into PSDP list.