The government may further slash funds under Public Sector Development Programme (PSDP) allocation for projects during the second half (January-June) of the current financial year to the tune of Rs 70 billion. Sources revealed to Business Recorder here on Saturday that a slash in funds was being considered in addition to the Rs 100 billion throw forward adjustment in PSDP due to financial constraints.
The decision was taken in a meeting held in the Planning Commission here on Saturday to slash 35 percent or Rs 70 billion in the funds to be released during the second half of the current financial year. The meeting was also attended by Finance Ministry officials.
During the meeting, it was decided to direct the concerned ministries to identify the projects for the purpose of reduction in funds releases, the sources said, adding that the government would make different cuts in releases according to the completion stage of the projects.
According to the sources, the fiscal deficit is targeted to decline to 4.2 percent of gross domestic products (GDP) in current financial year from 7.4 percent in the 2007-08 financial year. "The government has committed to the International Monetary Fund (IMF) to reduce domestically-financed development spending by about one percent of the GDP through better project prioritisation," said the sources.
Total PSDP allocation in the 2008-09 budget for development projects was Rs 371 billion that was reduced to Rs 271 billion after throw forward adjustment of Rs 100 billion. The government has already released Rs 71 billion, i. e. 19 percent of total allocation, during the first half (July-December) of the current financial. The government is working to place 35 percent or Rs 70 billion cut in releases of remaining Rs 200 billion PSDP due to financial constraints.
The government released Rs 132 billion or 39 percent of the total allocation under PSDP in first half of last financial year. Under the government's throw forward initiative, social sector faced a cut of Rs 79. 5 billion in PSDP allocation; Rs 30 billion in education, Rs 39.7 billion in health; Rs 0.4 billion in population; Rs 0.9 billion in social welfare; rupees one billion in women development; Rs 0.3 billion in manpower; and Rs 7.2 billion in media, culture, tourism, sports and youth. Sources said the Prime Minister had approved to drop 140 locally funded projects worth rupees seven billion from the list of the current financial year's PSDP allocation.
THE FOLLOWING IS THE BREAK-UP OF THIS CUT:
-- Six projects of Water and Power Ministry; five projects in information technology; 15 projects in food and agriculture; three projects in finance; 28 projects in science and technology; 13 projects in commerce; 30 projects in health; six projects in housing; six projects in board of investment; 14 projects in Higher Education Commission (HEC); and three projects of Interior Ministry.
The total cost of 15 agriculture-related projects was Rs 9.189 billion for which the Federal government allocated Rs 420.70 million in PSDP for 2008-09 all of which are categorised as throw forward for next year.
These include improvement of agriculture and livestock markets and marketing system; commercialisation of tea production; agriculture sector development loan (Phase-II); national pesticides residues monitoring system in Pakistan; national bio-saline agriculture programme; construction of office building for Pakistan Central Cotton Committee at Karachi; managing Burewala Strain of Cotton Virus; adaptation of integrated pest management approach for cotton crop in Sindh; reconstruction of Test House in DALPMG at Karachi; introduction of sugarbeet and enhancement of sugarcane productivity; construction of Sukkur outpost for the desert locust survey and control works; operationalisation /commissioning plant quarantine laboratory; national commercial seed production programme (PC-II); research and development of cotton program (PC-II); commercialisation and promotion of olive and olive products through public-private partnership (PC-II); exploitation and management of water resources for development of Peri urban area around ICT.
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