ISLAMABAD: Amid a boycott by the chief ministers of three provinces where opposition parties are in power, Planning Minister Ahsan Iqbal on Tuesday claimed that the National Economic Council approved Rs1.030 trillion federal development budget for next fiscal year.
However, top finance ministry officials also made a counterclaim immediately after the NEC meeting and said that Q Block would not fund the Rs1.030 trillion Public Sector Development Programme (PSDP) for FY2018-19.
“The finance ministry would marginally increase the federal cabinet-approved Rs800 billion development budget ceiling to Rs830 billion,” they said.
It was probably the most chaotic National Economic Council meeting held in the country’s recent history in which three provinces took a hard stance against the federal government while the finance and planning ministries were also not on the same page.
Prime Minister Shahid Khaqan Abbasi chaired the NEC meeting, which for a brief period was also attended by the chief ministers of Sindh, Balochistan and Khyber-Pakhtunkhwa.
In an earlier budget-related meeting, the four provinces had indicated Rs1.013 trillion for spending under their own Annual Development Plan.
Since the provinces staged the boycott after the start of the NEC meeting, their budgets could not be discussed.
Sindh Chief Minister Murad Ali Shah, Khyber-Pakhtunkhwa Chief Minister Pervez Khattak and Balochistan Chief Minister Abdul Quddus Bizenjo took a unanimous stance: that the federal government did not have the mandate to present next year’s budget when its term is ending on May 31.
They also objected to the federal government’s decision to include new schemes in the federal PSDP for FY2018-19.
Their other objection was initiating new projects in those areas of Sindh and K-P where members of the Pakistan Muslim League-Nawaz or its allied parties won the last elections.
This could put pressure on the federal government that is set to announce next year’s budget on April 27.
After boycotting the NEC meeting, the provincial chief ministers addressed a hurriedly-called news conference and put a question mark on the constitutional authority of the NEC to approve the PSDP in the absence of a majority of the NEC members.
They were of the view that the majority of the 13 NEC members were absent from its meeting. Even Federal Minister for Industries Ghulam Murtaza Jatoi did not attend Tuesday’s meeting to the embarrassment of the federal government.
“Article 156 of the Constitution states that the NEC’s role is only advisory in nature,” said Iqbal while talking to The Express Tribune after the NEC meeting.
“The NEC shall review the overall economic condition of the country and shall, for advising the federal government and the provincial governments, formulate plans in respect of financial, commercial, social and economic policies…ensure balanced development and regional equity,” states Article 156 of the Constitution.
“The right to approve the federal PSDP rests with parliament and no province has the authority to object to it,” said Dr Miftah Ismail, Adviser to Prime Minister on Finance, while talking to The Express Tribune.
“As the discussion on the PSDP for 2018-19 started, the provincial chief ministers complained that their projects had not been included in the PSDP,” said Ahsan Iqbal.
He said after the 18th Amendment in the Constitution, provincial schemes have been excluded from the centre’s domain.
Iqbal said the federal PSDP was largely limited to infrastructure projects “but some provinces have tried to push their schemes in the federal PSDP”.
“The federal government cannot put on hold the approval of new projects.”
The PSDP is in accordance with the division of subject between the federal and provincial governments in the post-18th Amendment scenario, according to the Planning Ministry.
The planning minister said that during the NEC meeting, the prime minister has approved an allocation of Rs1.030 trillion for the next year’s PSDP. “The amount is slightly higher than the outgoing fiscal year’s original PSDP allocation of Rs1.001 trillion.”
Iqbal said that included Rs825 billion for the planning ministry-administered projects and Rs105 billion for special programmes like for Temporarily Displaced Persons.
“Another amount of Rs100 billion has also been approved as block allocation for the next government to start projects of its own choice,” said the planning minister, “This would bring the total federally-funded PSDP to Rs1.030 trillion.”
Ministry disputes claim
“The finance ministry does not endorse Rs1.030 trillion federal PSDP budget for the next year,” confirmed a top finance ministry official while talking to The Express Tribune.
He said that the federal cabinet has already approved Rs800 billion ceiling for the development budget for next year.
“At best, the finance ministry would give only Rs830 billion from the budget.”
“The finance ministry does not take responsibility for additional Rs200 billion and no allocation will be made in the budget in this regard,” said the senior ministry official.
On the basis of Rs800 billion federal PSDP, the federal cabinet has approved an outlay of Rs5.237 trillion of the next year’s budget. Any change in the PSDP size will affect the overall size of the budget, accordingly.