‘Historic’ Rs1.001 trillion allocated for development budget

Nearly half will be spent on govt’s ‘special schemes’ and meeting requirements of CPEC projects

ISLAMABAD: The federal government has unveiled a Rs1.001-trillion Public Sector Development Programme for the upcoming fiscal year, and nearly half of it will be spent on ‘special schemes’ and meeting funding requirements of the China-Pakistan Economic Corridor (CPEC) infrastructure projects.

The proposed PSDP for fiscal year 2017-18 is Rs201 billion or 25% higher than the outgoing fiscal year’s development outlay. The demand for funding politically-motivated schemes during an election year, coupled with infrastructure needs of mega projects initiated during the last four years, led to this historical allocation of Rs1.001 trillion for federal development spending



The proposed PSDP for fiscal year 2017-18 comprises of 1,145 projects, 153 more than that of the outgoing fiscal year.

However, out of this Rs1.001 trillion, the share of Planning Ministry-administrated PSDP will be Rs866 billion. The federal PSDP includes Rs165.6 billion in foreign loans, which is 16.5% of the federal development budget.

Out of Rs1.001 trillion, the government has set aside Rs272 billion – 27% of the proposed federal development budget – for special programmes, Prime Minister and parliamentarians’ pet schemes. Another amount of Rs175 billion has been proposed for CPEC projects.

The total allocations for federal ministries are Rs377.8 billion, which is one-third higher than the outgoing year. Corporations have been given Rs380.6 billion, which is Rs62.6 billion or one-fourth more than that in the outgoing year.



The infrastructure sector has been given 67% of the total development budget and Rs407 billion have been provided for transport and communication. The National Highway Authority (NHA) will get Rs319 billion and Pakistan Railways Rs43 billion. The energy sector has been given Rs87 billion from the budget.

Under the head of special programmes, the federal government has proposed Rs242.5 billion in allocations for the next fiscal year. This includes Rs90 billion for security enhancement and relief for Temporarily Displaced Persons affected by Operation Zarb-e-Azb.

However, the nature of this spending falls under current expenditure, but the government has clubbed it with development, which has diverted a significant portion of the budget for non-development activities. In the outgoing fiscal year, Rs100 billion was proposed for TDPs and security establishment.



A sum of Rs25 billon has again been proposed for Gas Infrastructure Development Cess fund, although the government could not spend a similar amount in the outgoing fiscal year.

A sum of Rs144.5 billion has been allocated for projects and initiatives in which Prime Minister Nawaz Sharif and parliamentarians will have a direct or indirect say. These include PM’s packages in health, roads, energy and water and laptop schemes.

For four schemes of Prime Minsiter Nawaz Sharif, an amount of Rs19.4 billion has been allocated under the Ministry of National Health Services, Regulations and Coordination. These includes Rs10 billion for PM’s National Health Programme — phase I & II. An amount of Rs9.3 billion has been proposed for PM’s Programme for new hospitals and creating a support infrastructure for PM’s hospital scheme. The allocations for PM’s pet schemes are 40% of next year’s total health sector’s development budget.

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The Ministry of National Health Services, Regulations and Coordination has been given Rs48.7 billion –90% more than the outgoing fiscal year’s budget. The Kashmir Affairs and Gilgit-Baltistan Division will get Rs43.6 billion for next year, which is 69% higher than this year’s allocation.

Higher Education Commission will get Rs35.7 billion — higher by 65%. Housing and Works Ministry will get Rs11.1 billion — up by two-thirds due to two road projects in Chakwal region. The Planning Ministry will have a Rs16.8-billion budget — higher by 40%. The Water and Power Ministry will get Rs36.5 billion in the next fiscal year — 14% higher than the outgoing fiscal year.

Wapda has been given roughly Rs61 billion as against Rs131 billion allocation in the outgoing fiscal year.



What appears to be a result of fulfilling demands of the voters, the PM’s Energy for All and Clean Drinking Water for All special programmes will get Rs25 billion – Rs12.5 billion each.

For PM’s Global SDG’s Goals, an amount of Rs30 billion has been proposed. This money will be spent on the recommendations of the parliamentarians. For Special Federal Development Programme, an amount of Rs40 billion has been proposed in the new budget. This money will also be spent on the desire of the PM and his party members in the National Assembly.

CPEC allocations

For the new financial year, the government has set aside Rs175 billion for CPEC projects including Rs5 billion block allocation.

The total cost of CPEC infrastructure projects is estimated at Rs1.08 trillion, which is about one-third more than the previous year. So far, Rs231 billion have been spent on these schemes, mainly on eastern corridor projects, leaving a balance of about Rs850 billion that will be spent in coming years.



The NHA will get about Rs160 billion for carrying out work on CPEC infrastructure projects.

Unlike the previous years, this time the federal government has given sufficient resources to three main schemes of the western route. For the construction of Hakla-Yarik-Dera Ismail Khan motorway of the western route, the Planning Commission has proposed Rs38 billion for the next year. The total cost of this scheme is Rs110.2 billion and the ministry allotted Rs16.4 billion spending for the outgoing fiscal year.

The government has also included Basima-Khuzdar road of the western route in next year’s PSDP, allocating Rs1.5 billion for its construction. The total cost of this project is Rs19.2 billion and only Rs10 million have so far been spent on it.



The government has also proposed Rs4.6 billion for dualization of Yarik-Mughalkot-Zhob project of the western route. The total cost of this scheme is Rs74.5 billion out of which only Rs850 million have been spent so far.

The major chunk of infrastructure projects will still go to the eastern corridor projects.

For Multan-Sukkur section of the Lahore-Karachi Motorway, Rs30.2billion are proposed for next fiscal year against the remaining financing requirements of Rs213 billion. The total cost of this project is Rs298 billion. For Lahore-Abdul Hakeem section, Rs54.4 billion have been proposed for next fiscal year against the outstanding requirements of Rs85.7 billion. The total cost of this project is Rs150.7 billion. The work on both these projects is moving at a faster pace.



For the construction of Thakot-Havelian road on the eastern route, the government has proposed Rs25.2 billion against the remaining requirement of Rs101.8 billion. For land acquisition of this project, the government has proposed Rs800 million.

For construction of Burhan-Havelian Expressway, the government has proposed Rs3 billion to complete the remaining work. Two new projects; Gilgit-Shandor-Chirtral road, having a total cost of Rs22 billion, and Mirpur-Mangla-Muzafarabad-Mansehra road worth Rs142 billion have also been added under the CPEC umbrella. However, the government has made a token allocation of Rs200 million for each project.

 A seven-year old project – improvement and widening of Jaglot-Skardu road project – has been included in the CPEC basket. The total cost of this scheme is Rs22.1 billion and Rs6 billion have been proposed in the next budget.

The Ministry of Interior has also managed to include a project having a total cost of Rs1.8 billion for providing security to CPEC projects. For Gwadar International Airport, Rs1 billion have been proposed against the remaining requirements of Rs21.2 billion.

The government has proposed Rs1.5 billion for construction of the Eastbay Expressway project of Gwadar against the remaining requirements of Rs14 billion.