Govt likely to allocate Rs1.2tr in next budget for PSDP

ISLAMABAD    -   The federal government is likely to allocate approximately Rs1.2 trillion for the Public Sector Development Programme (PSD) fiscal year 2024-25, it is learnt reliably here. The Finance Division has provided Indicative Budget Ceiling of Rs1.2 trillion for Public Sector Development Programme for the upcoming fiscal year, to the Planning Ministry, official source told The Nation. Due to late provision of IBC for developmental budget, the planning ministry didn’t had enough time to either convey the ministries/division their prospective allocations or hold the priority committee meetings.

The meetings of the priorities committees, to shortlist important project for the PSDP, have already been skipped. The Ministry has received the IBC just around 72 hours ahead of the Annual Plan Coordination Committee meetings, which is tentatively scheduled for 29th May, 2024.However, there is a lot of work to finish in next two days, therefore the date of holding the APCC may be extended till 31st May, 2024, the source said.

Earlier the meeting of the APCC was proposed on 27th or 28th May for the meeting, however, due to delay in IBC, it is more likely to be held on 29th May,” the source added. Similarly, the source said that the meeting of the National Economic Council (NEC) is likely to be held on 3rd June. Notably, the federal government has yet not constituted the National Economic Council.

The NEC meeting will approve the country’s National Development Outlay which includes the Federal PSDP, Provincial ADPs, and will finalize the GDP growth target for the next fiscal year. The ministries/divisions are hardly to utilize 50 percent of the PSDP allocations during the ongoing fiscal year, however, instead of downward revision in the development budget the government plans to enhance it by approximately Rs 260 billion for the PSDP 2024-25. Initially, the PSDP allocation during ongoing FY 2023-24 was Rs 950 billion which included Rs 875 billion of rupee component, while Rs 75 billion was FEC component. However, now the rupee component has been slashed by Rs 10 billion to Rs 865 billion, which has resulted in a reduction of PSDP allocations to Rs 940 billion.

So far the Ministry of Planning has received demands of over Rs 2.9 trillion for development projects from the ministries/divisions for the upcoming PSDP 2024-25.

It is worth to note that the releases of Public Sector Development Programme (2023-24) funds for the development projects have come to a standstill as no authorization for the releases had been issued by the Planning Ministry during the months of February to April.

During the last month of the caretaker government and first two months of the incumbent PML(N) government, no authorization of PSDP funds has been issued, official data revealed. During the first seven months of the ongoing fiscal year 2023-4 (July to January), the ministry of planning had issued the authorization for the release of Rs 507.980 billion, however, since then (February to April) no release has been sanctioned, the documents revealed.

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