Coalition partners get big pie of Rs950 billion PSDP

Development budget for FY24 higher by Rs236b compared to outgoing year

ISLAMABAD:

The federal government on Friday laid before the National Assembly a Rs950 billion Public Sector Development Programme (PSDP), higher by one-third over spending in the outgoing fiscal year, after incorporating more changes in order to appease its political allies.

The PSDP 2023-24 is Rs236 billion higher than this fiscal year and mostly reflects the needs of politicians instead of fiscal prudence and discipline.

The government made significant changes in the PSDP after its approval by the National Economic Council (NEC) on June 6. They were made in light of demands put forward by the allies, mainly smaller parties.

The PSDP book showed that the government further increased the allocation for certain ministries compared to the document approved by the NEC this week.

Out of the proposed allocation of Rs950 billion, nearly half has been given to the newly included more than 300 schemes, indicating the government’s election priorities. This is one of the highest ratios that will put the country’s development spending on a wrong track.

For the ongoing 871 schemes, hardly Rs500 billion has been allocated, which will severely impact work on them and push completion period far behind the schedule. This will also increase the cost of completion due to an uncontrolled inflation in the country.

According to the PSDP book, an allocation of Rs80 billion has been made for the prime minister’s initiatives and another Rs90 billion has been earmarked for parliamentarians’ schemes.

Similarly, around Rs50 billion has been set aside for provincial projects despite the federal government being on the brink of default. On June 6, the government proposed Rs42.4 billion for the provincial projects but that did not appease its political allies.

In the NEC huddle, the government also proposed an allocation of Rs2 billion for the development projects of the Defence Division, which has now been increased to Rs3.4 billion, according to the proposed budget.

In yet another move that shows how a fiscally irresponsible budget has been prepared, over 135 projects have been included in the proposed PSDP for fiscal year 2023-24 whose approval has not yet been secured.

The government has proposed Rs80 billion worth of various initiatives of Prime Minister Shehbaz Sharif. These include Prime Minister’s Initiatives for Solar Tube Wells, Prime Minister’s Youth Programme for Small Loans, Pakistan Endowment Fund for Education, Prime Minister’s Initiatives for Support of IT Start-ups & Venture Capital, Prime Minister’s Initiatives for Women Empowerment, Prime Minister’s Laptop Scheme, Prime Minister’s Green Revolution 2.0, Prime Minister’s Youth Skill Development and Prime Minister’s Institute of Sports.

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All these initiatives appear to be aimed at the youth voters ahead of the next general elections.

The government has slightly reduced the allocation for the National Highway Authority from the earlier recommended Rs161 billion to Rs157.5 billion. Initially, the government proposed Rs101 billion but the Jamiat Ulema-e-Islam did not accept it.

To pay for these adjustments, the government has reduced the allocation of Rs10 billion to clear the liabilities of various projects to Rs5 billion.

It has also reduced the budget of the water resources ministry from the recommended Rs110 billion to Rs107.5 billion. It is still Rs10 billion higher than the outgoing fiscal year.

Nearly 1,190 schemes have been included in the next year’s PSDP. There are 348 projects worth Rs428 billion that have national significance. About 168 projects of Punjab have been added to the PSDP and Rs79 billion has been given for FY24.

The Power Division has been given Rs54.5 billion as against Rs50 billion in the outgoing fiscal year. Suparco’s development budget for the next fiscal year has been proposed at Rs6.9 billion, slightly lower than this fiscal year.

The development allocation for the Ministry of Science and Technology has been proposed at Rs8 billion, better than the one presented to the NEC on June 6 and also higher than the current fiscal year.

The Ministry of Railways will get Rs33 billion as against Rs26 billion in the outgoing fiscal year. The planning ministry will be provided Rs24.9 billion as against Rs5.5 billion in the outgoing fiscal year.

Pakistan Atomic Energy Commission’s development budget has been estimated at almost the current fiscal year’s level as it will get Rs26.1 billion.

The National Health Services will receive Rs13.1 billion, slightly better than this fiscal year, while the Ministry of National Food Security has been given only Rs8.9 billion compared to Rs13.1 billion in the current fiscal year.

The interior ministry’s proposed development budget will be Rs10 billion, which is higher by Rs2 billion than what was recommended to the NEC and also higher than this fiscal year.

The Ministry of Housing and Works will get Rs40.1 billion, up Rs4 billion than the one proposed in the NEC meeting. The housing ministry is controlled by the Jamiat Ulema-e-Islam and the party has managed to secure big allocations for the ministries under its administrative control, including the NHA.

Published in The Express Tribune, June 10^th, 2023.

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