ISLAMABAD - The Islamabad Chamber of Commerce and Industry (ICCI) has shown concerns over 32 percent cut in development budget.
The government, during first half of current fiscal year has sanctioned only Rs225.4 billion out of total allocation of Rs675 billion under Public Sector Development Programme (PSDP) 2018-19 for various development projects, which is reportedly 32 percent lower as compared with the disbursements made in the first half of previous fiscal year.
It said cut in the budget for development projects was not a good sign for the private sector as it would reduce demand for manufacturing goods, further hurt the business activities and slowdown the economic growth of the country.
Federal Public Sector Development Programme (PSDP) plays important role in the growth of indigenous industry as increase in PSDP created more demand for indigenous products, president ICCI Ahmed Hassan Moughal said in a statement issued here on Tuesday.
He said the downward revision of PSDP budget in the first mini-budget and cut in the sanctioned budget for development projects in the first half of current year would further hurt the domestic industry and affect its growth.
He said that the current government has set targets to build five million houses for low income people and create 10 million jobs, but its measures to slash budget for development projects would thwart its efforts to achieve these targets and uplift the living standards of people.
He stressed that instead of slashing budget for development projects, government should increase it by cutting other expenses in order to stimulate the economic growth of the country.
Rafat Farid, Senior Vice President, Islamabad Chamber of Commerce and Industry said that budget strategy allowed the ministries to spend 40 percent of their annual development budgets in the first half of a fiscal year, which meant that the development spending should have been Rs270 billion instead of Rs225.4 billion during this period.
Iftikhar Anwar Sethi, Vice President, ICCI said that the PTI after coming into power had introduced austerity measures, which was laudable.
However, he said that austerity campaign should not affect development projects as subjecting development program to austerity measures would not help the government to put Pakistan on the path of sustainable economic growth.