Proposed PSDP allocation for FY21-22 fixed at Rs. 900 billion, with 72 percent of this to be utilized for ongoing projects
Pakistan’s National Economic Council (NEC) on Monday approved Rs. 2.1 trillion development outlay for the upcoming fiscal year, including a Public Sector Development Program of Rs. 900 billion.
Chaired by Prime Minister Imran Khan, the meeting of the NEC decided that the provinces would spend Rs. 1.2 trillion from their own resources for public development projects, noting that the proposed federal PSDP was 38 percent higher than the outgoing fiscal’s original budgetary allocation of Rs. 650 billion. It approved 72 percent of the PSDP, or Rs. 648 billion, for ongoing projects, while 28 percent has been allocated for new schemes.
The NEC allocated 63 percent of the proposed PSDP, Rs. 565 billion, for infrastructure, while the health sector was granted Rs. 30 billion, or 3.3 percent, and education Rs. 50 billion or 5.5 percent of the federal development budget. The meeting also decided to earmark Rs. 68 billion for parliamentarian schemes. However, it drastically reduced the allocation for COVID relief activities from Rs. 70 billion to Rs. 5 billion. Agriculture has been allocated just Rs. 12 billion or 1.3 percent of the proposed budget.
A summary issued by the Planning Ministry after the meeting said that the water sector had been allocated Rs. 91 billion or 10 percent, while the energy sector’s proposed allocation stands at Rs. 118 billion or 13 percent of the total budget outlay.
The summary also claims that the government has allocated Rs. 65 billion for three “special packages,” against Rs. 1.8 trillion required. As part of the government’s stated goal of developing “neglected” areas of the country, a plan has been formulated for southern Balochistan that comprises 199 projects and requires allocation of Rs. 601 billion. However, only Rs. 20 billion has been earmarked in the upcoming fiscal for this. Similarly, the Rs. 739.2 billion Karachi Transformation Plan has only been allocated Rs. 25.4 billion.
For the merged tribal districts of Khyber-Pakhtunkhwa, allocation has been set at Rs. 54 billion, while the prime minister’s flagship Ten Billion Tsunami Program has proposed allocation of Rs. 14 billion.
The Higher Education Commission has been allocated Rs. 42.5 billion, 44 percent higher than the outgoing fiscal, while the Kashmir Affairs and Gilgit-Baltistan governments will get Rs. 70 billion, a spike of 33.6 percent. The Health Ministry will get Rs. 21.7 billion, Rs. 7 billion higher than was allocated for it in FY20-21.
The Pakistan Atomic Energy Commission, meanwhile, has been allocated Rs. 27 billion or Rs. 3.7 billion higher than the outgoing fiscal year. The water resources ministry will get Rs. 103 billion, 16 percent higher than the outgoing fiscal, with the Diamer-Bhasha Dam to be allocated Rs. 15.5 billion for construction, and Rs. 7 billion for land acquisition and resettlement of the affected population. Mohmand Dam has similarly been given Rs. 5.5 billion in the next fiscal year.
The Pakistan Railways has been allocated Rs. 30 billion, Rs. 6 billion higher than the outgoing fiscal, of which only Rs. 6.2 billion has been allocated for the Mainline-I project of the China-Pakistan Economic Corridor that government ministers keep claiming would prove the panacea of the deficiencies in the national institution. The National Highway Authority budget has actually been reduced by Rs. 5 billion to Rs. 113.8 billion.
The NEC was also informed that Rs. 61 billion of the PSDP had been allocated for financing Public-Private Partnership projects, including the Sukkur-Hyderabad Motorway and the Sialkot-Kharian Motorway. The government hopes to launch the Karachi Circular Railway, KPT-PIPRI Freight Corridor, and other projects through the PPP Authority this year.
The meeting was marred by conflict, as Sindh Chief Minister Murad Ali Shah called out “unjust treatment” in allocations of budgetary resources to the province. He lamented that Sindh had been given only Rs. 1.5 billion against Rs. 44 billion for Punjab. To this, Prime Minister Imran Khan maintained that there was no discrimination. During the meeting, he emphasized on the need to increase the pace of implementation of development projects to ensure the gains of economic stabilization could be translated into economic growth for the common man.
The PTI has, in recent weeks, vowed to present a budget for fiscal year 2021-22 that is growth-oriented and provides relief to the masses. Sources have claimed that it is also seeking to cater to the demands of its parliamentarians amidst mounting concern over the government not spending enough on development in its previous three budgets.