PSDP gets 50% more allocation amid resource constraints

Rs540b will be spent on development to spur economic activity.

ISLAMABAD:

Despite all odds, the government on Wednesday announced an increase of 50% in the Public Sector Development Programme (PSDP) and allocated Rs540 billion with an aim to create new jobs and spur economic activity across the country.

“Let me say that despite curtailing the fiscal deficit, we are increasing development expenditure from the budgeted Rs360 billion in the current year to Rs540 billion, which is a significant hike of nearly 50%,” Finance Minister Ishaq Dar said in his budget speech in the National Assembly.

Providing details, Dar said provincial governments would make a further investment of about Rs615 billion in development schemes, taking total public sector investment to Rs1.155 trillion, which comes to a healthy 4.4% of gross domestic product.

However, the minister did point out financial constraints, saying, “clearly, there is room for further increase in development spending, but given the resource constraints we have protected development expenditure and are increasing it also as compared to current expenditure.”

Dar believed that this capital investment would create numerous jobs in various sectors of the economy and give a boost to economic activity, resulting in the creation of gainful opportunities for the people.



Unlike the outgoing fiscal year, discretionary funds for the prime minister, the ministers and state ministers have been done away with.

The government has earmarked Rs115 billion for new development projects promised during the election campaign. Projects that are expected to be launched include a metro bus system for Karachi, the country’s largest metropolitan city, and a similar bus network linking the twin cities of Rawalpindi and Islamabad.

Under the PSDP, Rs5 billion will be given to the Peoples Works Programme, now renamed as Tameer Pakistan Programme. In this area, Rs10 million will be given to every member of the National Assembly for development projects.



Rs109.3 billion has been allocated for communications, whereas the National Highway Authority will receive Rs63 billion. NHA will undertake work to link Gwadar with the rest of the country through a new road, which will bypass troubled parts of Balochistan.

Apart from these, Rs57.84 billion has been approved for water sector projects, Rs5.2 billion for education and training, Rs437.6 million for Inter-Provincial Coordination Division, Rs20 billion for Kashmir Affairs and Rs9.6 billion for Gilgit-Baltistan.

The allocation for National Health Services, Regulations and Coordination Division has been increased and it will get Rs25.73 billion in next fiscal year, against Rs24.2 billion in the current year.

The National Programme for Family Planning and Primary Health Care will receive Rs11 billion, and the National Maternal, Neonatal and Child Health Programme will receive Rs2.36 billion.

The allocation for the Higher Education Commission is Rs18.5 billion, to match the highly-competitive world market. The allocation for special programmes is Rs5 billion, to complete parliamentarians’ development schemes.



The Earthquake Reconstruction and Rehabilitation Authority (Erra) has got a higher allocation of Rs10 billion, against Rs7.5 billion in the current financial year. This will be spent on rehabilitation of people in earthquake-hit areas.

A huge amount of Rs30.96 billion has been earmarked for the revival of Pakistan Railways. Of this, Rs10.7 billion will be spent on procurement and manufacturing of 50 diesel-electric locomotives.

The Railways Division has launched a new scheme of improvement/renovation of the Narowal Railway Station at an estimated cost of Rs59 million in the constituency of Minister of Planning Ahsan Iqbal. The government has set aside Rs25 million in the budget for the project.

The allocation for other federal ministries include Rs13.07 billion for the Finance Division, Rs10.65 billion for the Planning and Development Division, Rs779.8 million for the Industries Division, Rs6.25 billion for the Interior Division, Rs3.54 billion for the Defence Division, Rs3.78 billion for the Housing and Works Division, Rs2.17 billion for the Cabinet Division, Rs2.17 billion for the Science and Technological Research Division, Rs2.36 billion for the Law and Justice Division, Rs50 million for the petroleum ministry, Rs841 million for the Commerce Division and Rs500 million for the Ports and Shipping Division.

Published in The Express Tribune, June 13^th, 2013.

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