ISLAMABAD: Islamabad Chamber of Commerce and Industry (ICCI) has shown concerns over major cuts in funds for Public Sector Development Program (PSDP) as it would badly affect the work on developmental projects and retard the economic growth of the country.
Muzzamil Hussain Sabri, President, Islamabad Chamber of Commerce and Industry said that enhanced spending on PSDP was vital to achieve sustainable economic development and improve living standards of the people. However, the ad-hoc approach of our successive governments to use funds from PSDP whenever they face problem of revenue shortfall which has held the country back from realizing its development potential.
He said the government has released only 41 percent funds (Rs.216.2 billion) for PSDP during the first seven months (July to January) of the current fiscal year while under its disbursement policy, it should have released at least 50 percent funds for PSDP during this period.
He said that the country’s PSDP for 2014-15 has already been slashed from original allocation of Rs.525 billion to Rs.477 billion making a reduction of Rs.48 billion apparently to meet the IMF criteria to restrict the budget deficit. However, it was not a wise approach as it would affect the pace of development works and increase poverty in the country.
He said there was a dire need of increased spending on infrastructure development to facilitate the growth of business activities. But, there were reports that government might make further cut of 22 percent in PSDP that would bring more problems for the economy as lower development spending would negatively impact the growth of trade and industry along with lowering the living standards of people.
Muzzamil Sabri said on one hand government is cutting PSDP and on the other hand it is raising GST on POL products. Both decisions would multiply difficulties for the common man who was expecting relief in the wake of massive reduction in international oil prices.
He was of the view that the economic development of the country could not be improved by taking such short sighted and ad-hoc decisions and stressed that the government should adopt prudent approach to reform the entire taxation system and energy sector in order to improve tax revenue and increase spending on developmental projects.
