The federal government presented a Public Sector Development Programme (PSDP) of Rs950 billion, specifically the PSDP 2023-24, to the National Assembly on Friday. This budget allocation reflects a one-third increase in spending compared to the previous fiscal year, demonstrating the government’s efforts to please its political allies by incorporating more changes.
The PSDP for 2023-24 is Rs236 billion higher than the current fiscal year’s allocation. However, it appears that the focus of this budget is more on the demands of politicians rather than on fiscal prudence and discipline.
Significant modifications were made to the PSDP after its approval by the National Economic Council (NEC) on June 6. These changes were made in response to the demands of smaller parties, which are key allies of the government.
The revised PSDP indicates that certain ministries have received increased allocations compared to the document approved by the NEC earlier this week.
Out of the proposed Rs950 billion allocation, nearly half has been dedicated to over 300 newly included schemes, which suggests that the government’s priorities are driven by upcoming elections. This disproportionate ratio could potentially divert the country’s development spending in the wrong direction.
For the ongoing 871 schemes, a meager allocation of around Rs500 billion has been made. This inadequate funding will severely impact the progress of these schemes and delay their completion, while also leading to increased costs due to uncontrollable inflation in the country.
According to the PSDP document, Rs80 billion has been allocated for the prime minister’s initiatives, and an additional Rs90 billion has been earmarked for parliamentarians’ schemes.
Moreover, approximately Rs50 billion has been set aside for provincial projects, despite the federal government being on the verge of default. The initial proposal of Rs42.4 billion for provincial projects on June 6 did not satisfy the government’s political allies.
During the NEC meeting, the government also proposed an allocation of Rs2 billion for development projects in the Defence Division, which has now been increased to Rs3.4 billion in the proposed budget.
In a concerning move indicating fiscal irresponsibility, the proposed PSDP for the fiscal year 2023-24 includes over 135 projects that have not yet received approval.
The government has also put forth various initiatives worth Rs80 billion under Prime Minister Shehbaz Sharif, targeting the youth voters ahead of the next general elections. These initiatives cover areas such as solar tube wells, small loans for the youth, education endowment fund, IT start-ups, women empowerment, laptop scheme, green revolution, youth skill development, and the Institute of Sports.
To accommodate these adjustments, the government reduced the allocation for clearing project liabilities from Rs10 billion to Rs5 billion.
Furthermore, the budget for the water resources ministry was reduced from the recommended Rs110 billion to Rs107.5 billion, still representing a Rs10 billion increase compared to the outgoing fiscal year.
The next year’s PSDP includes a total of 1,190 schemes, with 348 projects of national significance amounting to Rs428 billion. Additionally, 168 projects from Punjab have been added to the PSDP, with an allocation of Rs79 billion for FY24.
The Power Division will receive Rs54.5 billion, up from Rs50 billion in the outgoing fiscal year. Suparco’s development budget for the next fiscal year is proposed at Rs6.9 billion, slightly lower than the current year.
The Ministry of Science and Technology’s development allocation is set at Rs8 billion, an improvement over the amount presented to the NEC on June 6 and higher than the current fiscal year.
The Ministry of Railways will receive Rs33 billion, compared to Rs26 billion in the outgoing fiscal year. The planning ministry’s allocation will be Rs24.9 billion, significantly higher than the Rs5.5 billion in the previous fiscal year.
The development budget for the Pakistan Atomic Energy Commission is estimated to be nearly the same as the current fiscal year, with an allocation of Rs26.1 billion.
The Ministry of National Health Services will receive Rs13.1 billion, a slight increase from the current fiscal year, while the Ministry of National Food Security has been allocated only Rs8.9 billion, down from Rs13.1 billion.
The interior ministry’s proposed development budget is Rs10 billion, higher by Rs2 billion compared to the recommendation made to the NEC and also higher than the current fiscal year.
The Ministry of Housing and Works will receive Rs40.1 billion, a Rs4 billion increase from the proposal in the NEC meeting. As the Jamiat Ulema-e-Islam controls the housing ministry, the party has managed to secure substantial allocations for ministries under its administration, including the National Highway Authority (NHA).
Published in PakWeb, June 10th, 2023.
Stay informed and engaged with the PakWeb by following us on Facebook, Twitter, and participating in our Discussion Forums.
