In the budget of 2021-22, Rs 900 was allocated for the Public Sector Development Programme (PSDP) but International Monetary Fund asked the government to reduce this amount. Under the influence of IMF, the budget of PSDP was brought down to Rs 700 billion. Now the government has again proposed to reduce another Rs 100 billion from the development budget. This reduction will create an effect on the ongoing development projects.
Asad Umar, the Federal Minister for Planning and Development had a meeting with the Federal Finance Minister, Shaukat Tarin, and urged him to review the decision of this cut-off. He told the finance minister that the leftover amount will result in a situation where the spending orders already issued to the ministries would have to be withdrawn.
At present, there are 1,165 projects with an estimated cost of Rs 9.7 trillion. After adjusting the expenditures, the remaining financial requirement is estimated at Rs 6.8 trillion but with Rs 600 billion which will be left, the completion of these projects will take more than 11 years.
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According to the sources of the Ministry of Planning, the government had authorized the spending of Rs.509 billion but spending so far remained at Rs 338 billion. A few weeks ago, the ministries had demanded an additional Rs 254 billion for the completion of the projects. Pakistan Atomic Energy Commission (PAEC) had demanded Rs 164 billion for its ongoing projects. But it could be allocated only Rs 27 billion during the current fiscal year. Out of these Rs 27 billion, the government gave Rs 17 billion so far.
The Ministry of Finance was carrying out 69 projects, costing Rs 318 billion but it was allocated Rs 123 billion, and spending so far remained at around Rs 70 billion. The reduction in the PSDP budget has aggravated the present political situation as there is big pressure on the government by the allies for funding the projects in their constituencies.
