ISLAMABAD - The caretaker government is likely to impose a drastic cut of up to 50 percent on the Federal PSDP 2023-24, owing to financial crunch.
To impose the cut on the developmental funds, Finance Ministry has asked the Ministry of Planning to review the portfolio of projects in the PSDP 2023-24 and characterize them in four categories, official source told The Nation yesterday.
The categorization of the projects is being done for the purpose of enhancing ensuring, deferring and stopping of funds to various categories of projects, said the source. The first category will be related to strategically important projects, followed by ongoing ready-to-complete projects, problematic projects, and non starters. Under the plan, it has been decided to enhance funding for the strategic important projects, ensure it for the ongoing near-to-completion projects, defer it for the controversy-hit projects, and stop it to non-starter, the source explained.
The ministries and division have been conveyed about the categorization of the development schemes, said the sources.
Ignoring the low capacity of the ministries/ division for fund utilization, the PDM government had allocated Federal PSDP of Rs1.150 trillion for the fiscal year 2023-24, which was almost 44 per cent higher than Rs800 billion development budget of the previous fiscal year. The federal developmental outlay of Rs 1150 billion included Rs950 billion PSDP for Ministries and Divisions and Rs200 billion Viability Gap Funding (VGF) for the PPP mode projects. Despite being aware of the little financial space for the new schemes, the PDM government had included around 378 (30 percent) new or unapproved schemes in the PSDP 2023-24, with the allocations of Rs250 billion during the ongoing fiscal year. Of the new schemes, 197 were unapproved or under process at the time.
The previous government of PDM had held 33 meetings of the Central Development Working Party (CDWP) in its tenure and hurriedly approved projects worth hundreds of billions of rupees without proper technical and economic evaluation. In the first one year of the PDM government, around 33 development schemes were approved by the CDWP, however, during the last six months of its tenure, more than 100 projects got the nod of the forum, said the source. The proper evaluation of the project PC-I requires three weeks time; however, during the 16-month tenure, majority of the PC-I were presented to the CDWP for consideration within 24 hours of its arrival in the Planning Commission, the sources said.