ISLAMABAD - The government has no plans to cut Rs290 billion Public Sector Development Programme (PSDP) for the current fiscal year. Rs71.6 billion has been released for infrastructure, social and other projects during July 1 to November 18. 20 pc funds released in second quarter: An official source said the Ministry of Finance has not shared any intention to slash PSDP and funds were being regularly released for different projects. Under the release mechanism, he said, during the first quarter July-September of the current fiscal year 20 per cent of funds were released while during the second quarter another 20 per cent of the ceiling would be released. He said the government was following austerity measures but so far there were no indications of any plans to cut the PSDP. Austerity measures could work to control expenditures but if adopted for development projects they work to impede growth and jobs. “We are releasing funds as allocated under the budget.”
Prioritising development: All the government departments were directed to utilise the funds firstly for projects that were more than 90 per cent complete and then give preference to other under implementation projects that were more than 60 per cent complete. However, he said that in some cases initiation on new projects which were critical for the country’s growth were allowed like the Diamer Bhasha Dam and Chashma Nuclear Power projects. “These are critical projects to meet the power requirement of the country and will take years to complete if initiated this year,” the source said.
Government has released Rs35.4 billion for 328 projects in the infrastructure sector, Rs35.5 billion for 849 projects in the social sector and Rs0.6 billion for 83 other projects during July to November 18. The allocations will pick up in the third quarter during which 25 per cent and remaining 35 per cent will be released in the fourth quarter of the current fiscal year.
Fiscal year targets: The annual plan for the current fiscal year targets a GDP growth of 4.2 per cent, with agriculture growth rate of 3.4 per cent, industry 3.7 per cent and services 5 per cent. Despite the financial constraints and extreme shortage of resources the government increased PSDP to Rs290 billion for the current fiscal year against the actual expenditure of Rs196 billion during the last fiscal year.
The source said Rs290 billion PSDP has a foreign exchange component of Rs36.5 billion and Rs33 billion for special programmes. Since the foreign aid disbursement amount was handled by the Economic Affairs Division, and releases against special programmes were being made directly by the Cabinet and Finance Divisions, the releases of Planning Division were exclusive of foreign exchange amount and special releases. It will be releasing only Rs220.5 billion during the current fiscal year.
Power and education sector: He said the monthly releases to National Highway Authority and Higher Education Commission were made in bulk as they were empowered to utilise the funds for different projects on priority. On the power sector projects, he said, the financing of the projects was being arranged by the Water and Power Development Authority (WAPDA) and it was not part of the budget. Even though they were being monitored by Planning Commission as under the rules any project having foreign exchange component of more than 25 per cent of the project cost comes under its ambit.