Suspicion shrouds PSDP

Though Rs525b, higher than revised budget, have been allocated. It is unclear whether proposed amount will be released

ISLAMABAD:

The federal government has proposed Rs525 billion for the Public Sector Development Programme (PSDP) for the new fiscal year – up by one-fourth or Rs102 billion over this year’s revised budget. One-fifth of the total budget for the next fiscal year will be financed through foreign borrowings.

But suspicions remain as to whether the proposed PSDP amount will be released or not, as there is last year’s precedent of the government proposing Rs540 billion, but releasing much less.

The proposed development budget includes Rs49 billion allocated for the Pak-China Economic Corridor, according to the PSDP document 2014-15 that the federal government unveiled in the National Assembly on Tuesday.

In comparison to the Rs5 billion allocated under the Tameer-e-Pakistan Programme last year, the federal government has proposed nothing for the next fiscal year. In the previous fiscal year, the government had already abolished the Prime Minister’s discretionary budget.



For the Higher Education Commission (HEC), the government has proposed Rs20.1 billion – an 8.6% increase since the outgoing fiscal year’s Rs18.5 billion. The government has proposed two new initiatives for improving human development indicators and narrowing inter-provincial disparities.

For Millennium Development Goals and the Community Development Programme, Rs12.5 billion has been set aside. An amount of Rs111.5 billion has been apportioned for the National Highway Authority (NHA), including Rs49 billion for spending on the Pak-China Economic Corridor next year. In the outgoing fiscal year, the NHA had been given Rs63 billion only.

The total cost of the Sino-Pak economic corridor, which stretches over 2,376 kilometres and is aimed at giving China access to the Arabian Sea via Pakistan, has been estimated at Rs746.4 billion.

The 959-kilometre long Karachi-Lahore Motorway will receive Rs30 billion for land acquisition for next year, out of its total land cost of Rs60.6 billion. China will bear the construction cost. The total cost of the 278-km long Lahore-Abdul Hakeem-Khanewal section is Rs41.4 billion and its next year’s allocation is Rs6 billion. The road will be developed on a build-operate-transfer (BOT) basis and Pakistan’s share will be 30%.

Similarly, the 387 kilometre-long Multan-Sukkur section’s total cost is Rs246 billion and the government has allocated Rs5.5 billion. Over 90% of the total cost or Rs221 billion will be borrowed from China.

The Sukkur-Hyderabad road, stretched over 296 kilometres, will be built on a BOT basis as well and the government’s 30% share amounts to Rs44.4 billion. It has allocated Rs3 billion for the next year.

The 460-km Raikot-Havelian-Islamabad section’s total cost is Rs354 billion. Some 90% of it will be borne by Chinese funding and the government has allocated Rs4.5 billion for the next year.

For the power sector, Rs63.6 billion have been proposed – an increase by Rs12.1 billion or over 23%.

For the water-sector development projects, the government has significantly slashed the allocation to Rs43.5 billion, which is Rs14.3 billion or 24.7% less than the outgoing fiscal year’s water-sector budget.

For the State and Frontier Regions, the government has allocated Rs19.1 billion, slightly up from last year’s Rs18.5 billion.

The government has slashed the development allocations of Kashmir Affairs and Gilgit-Baltistan by Rs8.4 billion or 27.7%, allocating Rs21.4 billion for the outgoing fiscal year.

Separately for the National Health Services, Regulation and Coordination Division an amount of Rs27 billion has been proposed, as against Rs25.7 billion of the outgoing fiscal.

For the development work of Ministry of Defence, Rs2.3 billion has been given, a decrease from last year’s Rs2.7 billion.


Published in The Express Tribune, June 4^th, 2014.