The government’s plans of huge development spending in the next fiscal year got a major jolt on Friday when the Annual Plan Coordination Committee was forced to retain the Public Sector Development Programme (PSDP) to this year’s mark of Rs 280 billion due to tight fiscal space.
The meeting chaired by Finance Minister Dr Hafeez Shaikh approved allocation of Rs 18 billion for Diamir-Basha Dam, Rs 13 billion for the Mangla Dam raising project, Rs 11 billion for the Neelum-Jhelum hydel power project. Allocation for the Chashma Nuclear power projects III and IV was made under the Rs 22 billion budgetary allowance for the Pakistan Atomic Energy Commission.
The meeting also approved Rs 2.1 billion to enable SUPARCO meet the deadline for launching its satellite, while Rs 6.8 billion was earmarked for various projects by the National Highway Authority (NHA). Briefing reporters after the meeting, Planning Division Secretary Sohail Ahmad said federal ministries had demanded Rs 480 billion, but the APCC approved Rs 280 billion only for consideration by the National Economic Council.
The foreign exchange component for the projects in the next fiscal year has been estimated at Rs 38.4 billion. Identifying energy, water and communication sectors as the top priority areas for development spending, Ahmad said it was decided that unless it was critical, no new development project would be initiated in the next fiscal year. The overall the size of the public sector development programme is projected at Rs 710 billion for next fiscal year, including Rs 430 billion for the provincial governments.
However, the provincial share is subject to approval by the NEC. Of the total federal PSDP, an amount of Rs 148 billion has been recommended for energy sector projects, Rs 118 billion for social sector, Rs 14 billion for other projects and Rs 10 billion for the Earthquake Reconstruction and Rehabilitation Authority (ERRA). Planning Commission Deputy Chairman Dr Nadeemul Haque said there was no guarantee that the development budget would not be slashed during the next fiscal year.