ISLAMABAD: The finance ministry has proposed Rs800 billion development budget for the next fiscal year, which is one-fifth less than the Public Sector Development Programme (PSDP) for this year and would affect physical progress on almost 1,100 schemes.
The finance ministry on Thursday formally informed the Ministry of Planning, Development and Reform about its intentions to allocate Rs800 billion for fiscal year 2018-19, said sources in the ministry. The amount is Rs201 billion or 20% less than the budget for the current fiscal year 2017-18 that is ending on June 30.
The indicative PSDP ceiling for fiscal year 2018-19 is in line with the Adviser to Prime Minister on Finance’s recent announcement. Dr Miftah Ismail had said that the PML-N government would not announce a fattened PSDP on April 27, as the next year’s development budget would be allocated only for ongoing schemes.
However, the planning ministry differs with this view of giving the budget only for ongoing schemes. The outgoing government has to leave some fiscal space in the macroeconomic framework for the upcoming government to announce new initiatives, according to a senior government functionary working in the Planning Commission.
In this fiscal year’s budget, the PML-N government had set aside Rs272 billion or 27% of the federal development budget for special programmes, Prime Minister and parliamentarians’ pet schemes. The sources in the finance ministry said that a significant chunk of this Rs272 billion can be easily saved in the next fiscal year.
The Rs800-billion indicative budget is not sufficient for the next fiscal year and the planning ministry would take this matter up with Prime Minister, said Planning Secretary Shoaib Siddiqui, while confirming the indicative budget.
He said that the Rs800 billion indicative ceiling also includes roughly Rs140 billion allocations for non-core development activities, which would further reduce the allocations for core development purposes.
In the outgoing fiscal year, the government had allocated Rs866 billion for core development activities and Rs165 billion for non-core development work, mainly Rs90 billion for army and temporarily displaced persons. The planning ministry does not treat Rs165 billion as part of the core development budget, as it does not have control over releases against these allocations.
