PSDP allocations

According to a Business Recorder exclusive, the Prime Minister, less than a week before the presentation of the federal budget in parliament, instructed the relevant ministers to rationalise and reprioritise the Public Sector Development Programme (PSDP) in favour of mega projects. The overriding assumption of the Prime Minister's directive was, one would hope, to prioritise those projects whose benefits would trickle down to a greater number of people. Unfortunately though, critics may well assume that the Prime Minister's objective was to insist on projects with high visibility and therefore with a greater positive political fallout.
A project, mega or otherwise, must be approved/prioritised only after undertaking a cost-benefit analysis premised on the economic rate of return as well as the internal rate of return. In other words, given the scarce resources available with the government, ad hoc projects with an obvious political flavour must be resisted. It is unfortunate that the rules of business allow the federal and provincial governments to disburse funds for mega projects like the renamed metro bus for the twin cities and seek approval under appropriations after project completion without any parliamentary debate or oversight. These rules must be changed and projects approved by relevant parliaments - federal or provincial - prior to initiating them.
The Prime Minister's directive is also contrary to the prioritisation criterion for development projects proposed by the Planning Commission namely to support those projects that are near completion first. This is a sound policy advice as delaying projects near completion may well lead to depreciation/erosion of any unused machinery already procured for the project and thereby significantly raise the cost of the project as and when it is reinitiated. In short, there should be a more informed decision-making process in this regard and one would hope that the Prime Minister defers to the relevant ministry headed by one of his loyalists namely Ahsan Iqbal, the relevant minister, to determine any project's priority based entirely on its economic viability that includes a cost-benefit analysis. The outcome of the analysis will determine whether the project is financially feasible, or if another project should be pursued.
The Prime Minister's directives have raised some legitimate concerns amongst the general public as to whether the list of projects itemised in the PSDP as contained in the budget documents is final or whether there are going to be some major changes during the year. The time between the directive issued by the Prime Minister and the federal budget's announcement is too short to maintain that his directives have already been implemented, not least because any changes in the list would have required reprinting of the budget documents - a process that certainly takes more than a week. Given that the budget documents show inaccurate data - Mohammad Zubair of the Privatisation Commission told Business Recorder that he had informed the relevant minister of inaccurate data pertaining to the privatisation proceeds which was 177 billion rupees and not 17.7 billion rupees - it appears doubtful if the list was revised as per the Prime Minister's directives in the budget documents.
PSDP is a very important component of the budget as it seeks to not only provide for meeting the severe infrastructural constraints that are an impediment to the country's economic growth, energy shortages considered to be by far the major contributor to slow industrial growth, but also generates employment opportunities. In addition, PSDP in this country is widely regarded as principal source of growth for the economy given that the government's heavy reliance on domestic borrowing has crowded out private sector, and hence it is necessary to rationalise as well as reprioritise it but only after undertaking a cost benefit analysis of such an every project.