The Finance Division's priorities committee will start its budgeting exercise from March 31, which is likely continue for around 12 days, to recommend budgetary allocation for development in 2008-09 financial year.
The Finance Division has notified the dates for the committee's meetings to all Divisions and autonomous bodies. The Water and Power Division will be the first one to present its development agenda to the committee, sources told Business Recorder on Sunday.
The allocation for the development budget is going to be tough for the government as the government is facing several challenges on economic front. The record surge in oil prices in the international market has put a lot of pressure on the national exchequer, while the previous government had capped the local petroleum prices for past over one year.
The current fiscal year also witnessed great pressure on the development budget and the government had to place a cut on the budgeted Public Sector Development Programme (PSDP) size, which was originally approved at Rs 485 billion. The allocation outside PSDP for development is Rs 239 billion.
Sources said that allocation for PSDP in the next fiscal year should increase in accordance with the projections of the five-year Mid-Term Development Framework (MTDF-2005-10). The PSDP-GDP ratio in the current fiscal year is around 4.8 percent and, under the MTDF, this ratio should touch 6.3 percent in 2009-10.
Keeping this in view, the PSDP must touch something over 5.5 percent of the GDP in the next fiscal year, which is the last but one year of the five-year development plan, sources said. According to them, there are a lot of new schemes approved by the Planning Commission under the development plan, which must continue to maintain the GDP growth trajectory at around 7 percent.
In 2006-07, 667 new schemes were accommodated in the 2007-08 PSDP with an allocation of Rs 45 billion, whereas in the current fiscal year so far the Planning and Development (P&D) Division has approved 218 development projects costing around Rs 565 billion. Apart from this, 1444 development projects are those which have been under execution for last some years.
Sources said that if looked into the quantity of the projects, there would a lot of pressure on the Finance Division to substantially increase the PSDP size. But, according to some recent reports, there is pressure from different Divisions that all new projects should not be accepted. Some circles also believe that P&D should concentrate on timely completion of the ongoing projects instead of increasing the number of schemes whose timely implementation always remains in question.
They said that the P&D Division has already requested the Finance Division to open a new bank account for new development projects. According to them, the planned development schemes of Wapda (water and power) would come up for discussion on March 31. This would be followed by Railways Division and Communication Division, NHA, Ports and Shipping Division etc on April 1. The meetings of the priorities committee will conclude on April 12, sources said.
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