ISLAMABAD: With rationalisation of non-developmental expenditure up to Rs150 billion, the government has created a cushion for increasing development outlay of Public Sector Development Programme (PSDP) from Rs530 billion to Rs650 billion for coming budget.
The National Economic Council (NEC), the highest constitutional economic decision-making body, under chairmanship of Prime Minister Imran Khan is scheduled to meet on June 10, 2020 for approving development budget and macroeconomic framework for next budget.
Finance Ministry has conveyed to Planning Commission for jacking up size of federal PSDP from proposed allocation of Rs530 billion to Rs650 billion for next budget.
When contacted, one top official of Finance Ministry termed the next budget “crisis budget” where the government intends to rationalise non-development expenditure in a big way to the tune of Rs100 to Rs150 billion.
This additional cushion, according to the sources, will be diverted towards mitigation of COVID-19 pandemic.
The government might divert Rs50 to Rs100 billion towards COVID-19 pandemic initiatives in the upcoming budget and the proposed allocation of other important projects will also be increased.
The NEC is all set to consider approval of national development outlay of Rs1,433 billion including federal PSDP of Rs650 billion and provinces development outlays of Rs783 billion. There will be Rs70 billion bloc allocation that will be utilised by Finance Division.
One top official of Planning Commission told this scribe that there was one major difference created by the government as no unapproved scheme would be made part of next fiscal year’s PSDP for 2020-21.
The Deputy Chairman Planning Commission and Secretary Ministry of Development faced a lot of political pressure but refused to insert unapproved development schemes at the last moment.
The Planning Commission had to convene two to three meetings in last week and even one CDWP meeting held on Saturday in order to approve PC-1 of certain projects.
With insertion of approved projects, it would help the planning managers to start utilisation of funds from start of the next fiscal year.
In the past, it was routine practice of ministries/divisions and departments that development projects were included in PSDP list without PC-1 and such practices created a lot of irk for the incumbent Minister for Planning in the outgoing fiscal year.
Federal Minister for Planning Asad Umar had to face a lot of resistance from CDA as he made all-out efforts to force them for preparation of PC-1 for water schemes for residents of Islamabad but the CDA became hurdle in the way because they never bothered to prepare PC-1 despite a lot of perusal from the minister of planning.
The NEC will also grant approval to macroeconomic framework for the next budget as the government envisages GDP growth rate of 2.3 percent in next fiscal year against negative 0.38 percent for outgoing fiscal year. The inflation target is set at 6.5 percent for the next budget against 9.1 percent for the outgoing fiscal year.
