Islamabad:
The government is expected to approve a record of 4.1 billions of national development rupees for the center and the provinces in the midst of the scarcity of resources which have forced it to prohibit small -scale projects and not to include new specific patterns for the province funded by the federal government for next year.
Despite the threat of blocking water by India, the government has proposed to reduce the allowance of the water sector by 45% or RS119 billion to only 140 billion rupees for the financial year 2025-2026 compared to the budget initially approved.
However, the Federal Public Sector Development Program (PSDP) proposed reflects the political priorities of the coalition government, with large allowances for road infrastructure, while the financing of education, health and water has been considerably reduced for exercise 2025-26.
The Annual Planning Coordination Committee (APCC) will only approve (Monday) the national development budget expenses for the federal government, four provincial governments and Pakistan special areas.
The Minister of Planning Ahsan Iqbal will chair the meeting, which will also recommend economic growth of 4.2% and inflation targets of 7.5% for the next financial year.
The Federal PSDP was finalized by a committee formed by Prime Minister Shehbaz Sharif aimed at meeting the needs of coalition partners.
The APCC will approve a cumulative expenditure of 4.1 billions of rupees for development, which will be 300 billion rupees or 8% more than the original budgets of this exercise approved by national assemblies and four provinces.
There has been a reduction in the federal PSDP, but the four provincial governments will cumulatively spend 28% more than this year’s budget for their own resources. The provinces are rich, thanks to the allocation of the 2010 -planned National Finance Commission.
The APCC will approve 1 billion of federal rupees of the PSDP, down RS400 billion compared to the initial budget for this exercise approved in June from last year. The federal government will borrow 270 billion rupees abroad to finance these expenses by 1 Billion of rupees.
The four governments plan to spend 2.8 billions of rupees, more than 609 billion rupees or 28% compared to the original budgets of this year. Provincial governments will also borrow 802 billion rupees abroad to finance their projects.
Another RS288 billion will be spent by public enterprises outside the federal budget.
Punjab is on a wave of spending, as it plans to spend RS1.19 Billions, which is higher of 346 billion rupees or 41% compared to the budget for the financial year.
Khyber-Pakhtunkhwa will follow Punjab with 440 billion rupees, also more than 63%.
The Sindh government plans to spend 887 billion rupees, more than 60 billion rupees or 7%. The Balutchistan government offers 280 billion rupees for development, which is higher by 32 billion rupees compared to the budget initially approved.
No budgetary space
Federal and provincial governments serve their handbags despite the country faced with difficult economic conditions. The federal government, forced by a limited budgetary space, once again allocates RS1 Billion, even if it has managed to spend only 600 billion rupees in the first 11 months of the current year.
The APCC will approve not to include again a provincial project in the PSDP due to tax constraints. He will also approve a moratorium on the approval of up to 1 billion projects up to the completion of the IMF program. However, an exception is also offered from the moratorium in the event of “convincing conditions”.
Despite the budgetary constraints, projects relating to discolored and provincial subjects are still funded by the Federal PSDP. According to the Ministry of Planning, around 30 to 40% of the PSDP goes to the provincial nature projects, which have seriously undermined the progress of the mega and the main projects of national importance, according to the Ministry of Planning.
Projects of national importance are delayed due to the financing of the propagation thin, and around 90% of current projects have been revised with an increase in costs and a time surpassing, he added.
The APCC can also issue instructions according to which development funds should not be diverted for non-development during the currency of the exercise.
The APCC will examine if projects having a high impact, focused on completion within 3 to 4 years, will be funded. The proposed PSDP gives priority to funded and nuclei projects abroad and with strong impact.
However, a rapid examination of the proposed PSDP suggests that despite the difficult economic conditions, the government has given importance to projects like a politically by increasing national Highway Authority allowances and provincial projects.
It has been proposed that the allocation of provincial projects has increased from 19 billion rupees to 93.4 billion rupees. Likewise, the NHA budget was proposed to be increased to a huge 229 billion rupees, up 49 billion rupees or 27%.
To give way to higher political expenditure of the coalition partners, the government has proposed to considerably reduce the financing of projects in the water and power sector.
The energy sector budget is proposed to be reduced by 72 billion rupees or 41% to 104 billion rupees. The distribution of the water sector is offered to be reduced from RS119 billion to only 140 billion rupees. The Diamer Basha Dam project will receive 35 billion rupees in the next fiscal year compared to 40 billion rupees this year, according to sources.
It was proposed that the budget of the Federal Ministry of Education is reduced by 27% to 20 billion rupees, while the budget of the Higher Education Commission is proposed to be reduced by 21 billion rupees or 32% to 45 billion rupees.
Despite the challenges, the government has also retained an allowance of 50 billion rupees for parliamentarians’ diets under the aegis of the sustainable development objectives program.
About 1,071 development projects with a cumulative cost of RS 13.4 Billions are currently being implemented.
They need another RS10.2 Billions for completion, which the Ministry of Planning declares to take more than 10 years.
Compared to the federal PSDP approved by 1.4 billion of original rupees in the budget, actual expenses at the end of May remained at 596 billion rupees, which hardly represents 43% of the approved budget of Parliament.
The government admits that Pakistan, with the IMF program, is undergoing certain limits and therefore the upcoming challenge is to take advantage of the limited resources so as to obtain maximum yields of each project to satisfy the objectives and objectives described in the national economic transformation plan, the five -year plan based on the 5th and the “Uraan Pakistan program” while exceeding the challenges.
There are also implementation problems, and during recent journals, the Ministry of Planning had identified 183 projects, mainly at DDWP, as a problematic and slow. It was recommended to tackle or close all these projects by June 2025.
By capping or closing such projects, around 1 billion of rupees could be saved and the budgetary space could be created for current projects in progress and for new priority projects with high impact, according to a proposal from the APCC.
