Islamabad:
The Government will approve a National Development Budget of RS4.1 Billion RS4.1 billion for the center and the provinces amid the shortage of resources that have forced it to ban small -scale projects and not include new specific schemes of the province financed by the federal government for next year.
Despite the threat of blocking water from India, the Government has proposed to reduce the allocation of the water sector by 45% or RS119 billion to only RS140 billion for fiscal year 2025-26 against the originally approved budget.
However, the proposed Federal PSDP) Federal Development Program reflects the political priorities of the coalition government, with strong assignments for road infrastructure, while funds for education, health and water have been significantly reduced for fiscal year 2025-26.
The Annual Plan Coordination Committee (APCC) will approve today (Monday) the disbursements of the National Development Budget for the Federal Government, four provincial governments and the special areas of Pakistan.
The Planning Minister, Ahsan IQBAL, will preside over the meeting, which will also recommend an economic growth of 4.2% and inflation objectives of 7.5% for the next fiscal year.
The Federal PSDP has been completed by a committee constituted by Prime Minister Shehbaz Sharif destined to accommodate the needs of the coalition partners.
The APCC will approve a cumulative disbursement of RS4.1 billion for development, which will be RS300 billion or 8% higher than the original fiscal year budgets approved by national and four provincial assemblies.
There has been a reduction in the Federal PSDP, but the four provincial governments will cumulatively spend 28% higher than this year’s budget for their own resources. The provinces are rich, thanks to the bad prize for the National Finance Commission of 2010.
The APCC will approve RS1 Federal PSDP, under RS400 billion compared to the original fiscal year approved in June last year. The Federal Government will borrow RS270 billion from abroad to finance this expense of RS1 Billones.
The four governments plan to spend RS2.8 billion, higher at RS609 billion or 28% on the original budgets of this year. Provincial governments will also borrow RS802 billion abroad to finance their projects.
Government -owned companies will spend other RS288 billion outside the federal budget.
Punjab is in an expenditure spree, since it plans to spend RS1.19 billion, which is higher at RS346 billion or 41% on the budget of this fiscal year.
Khyber-Pakhtunkhwa will follow Punjab with expenses of RS440 billion, also higher by 63%.
The Sindh government plans to spend RS887 billion, higher at RS60 billion or 7%. The Baluchistan government proposes RS280 billion for development, which is higher in RS32 billion on the budget originally approved.
No fiscal space
Federal and provincial governments are loosening their portfolios despite the country that faces challenging economic conditions. The federal government, limited by a limited fiscal space, is once again assigning RS1 billion, although it managed to spend only RS600 billion during the first 11 months of the current fiscal year.
The APCC will approve not include any new provincial project in the PSDP due to fiscal limitations. It will also approve a moratorium on the approval of up to RS1 billion projects until the end of the IMF program. However, an exception is also proposed from the moratorium in case of “convincing conditions.”
Despite fiscal limitations, projects related to returned subjects and the provincial nature are still being financed under the Federal PSDP. Around 30-40% of PSDP goes to provincial projects, which have seriously undermined the progress of Mega and central projects of national importance, according to the Ministry of Planning.
Projects of national importance are delayed due to thin propagation funds, and around 90% of current projects have been reviewed with increased costs and overflowing time, he added.
The APCC can also issue instructions that the development funds should not deviate at the purpose of non -development during the fiscal year currency.
The APCC will review whether the projects with high impact, focused on the completion within 3-4 years, will be financed. The proposed PSDP gives priority to funding and foreign core projects, and high impact.
However, a superficial look at the proposed PSDP suggests that despite the difficult economic conditions, the Government has given importance to nature political projects by increasing assignments for the National Road Authority and the projects of the provincial nature.
It has been proposed that the allocation for provincial projects increase from RS19 billion to RS93.4 billion. Similarly, it has been proposed that the NHA budget increases to a a whopping RS229 billion, in RS49 billion or 27%.
To leave space for greater expense in political priorities of the coalition partners, the Government has proposed to drastically reduce the financing of the projects of the water and energy sector.
It is proposed that the budget of the electricity sector be reduced at RS72 billion or 41% to RS104 billion. It is proposed that the allocation of the water sector be reduced at RS119 billion to only RS140 billion. The Diamer Basha DAM project will obtain RS35 billion in the next fiscal year compared to RS40 billion this year, according to the sources.
It has been proposed that the Federal Ministry of Ministry of Education be reduced by 27% to RS20 billion, while the Budget of the Higher Education Commission is reduced by RS21 billion or 32% to RS45 billion.
Despite the challenges, the Government has also preserved an assignment of RS50 billion for the schemes of the parliamentarians under the umbrella of the Sustainable Development Objectives Program.
Around 1,071 development projects are currently being implemented with a cumulative cost of RS13.4 billion.
Other RS10.2 billion need for completion, that the states of the Ministry of Planning would take more than 10 years to complete.
Compared to the original PSDP original approved RS1.4 billion in the budget, the real spending at the end of May remained in RS596 billion, which is barely 43% of the budget approved by the Parliament.
The Government admits that Pakistan, with the IMF program, suffers some limitations and, therefore, the challenge ahead is to take advantage of limited resources in a way to achieve the maximum performance of each project to satisfy the goals and objectives described in the National Plan for Economic Transformation, the five -year plan based in 5ES and the “Uraan Pakistan program” while exceeding the challenges.
There are also implementation problems, and during recent reviews, the Ministry of Planning had identified 183 projects, mainly at the DDWP level, as problematic and slow. It has been recommended to limit or close all these projects in June 2025.
By limiting or closing such projects, around RS1 Billones could be saved and a fiscal space for rapid movement projects could be created, as well as new high -impact high priority projects, according to a proposal for the APCC.
