Government is likely to earmark Rs 500 billion for next financial year Public Sector Development Programme (PSDP) 2009-10 that would be less by Rs 50 billion as compared to 2008-09 PSDP. Sources told Business Recorder that Planning Commission and Finance Ministry are working to earmark the PSDP allocation for the development projects during the next financial year and the proposal is being considered to earmark Rs 500 billion for PSDP.
Sources said that government may earmark Rs 500 billion due to financial constraints Government has already reduced the federal component of PSDP to Rs 219 billion for the current financial year. Planning Commission (PC) has also proposed that provinces should generate funds from their own resources to complete the development projects as the federal government is faced with severe financial constraints. Sources said that government is likely to provide funding for the ongoing projects during 2009-10.
A total of Rs 549.7 billion was earmarked for Public Sector Development Programme (PSDP) 2008-09. The allocation for the federal development programme has been reduced to Rs 219 billion to achieve the revised fiscal deficit target of 4.3 percent of GDP committed to International Monetary Fund (IMF). The fiscal deficit target for financial year 2009-10 has been set at 3.4 percent of GDP.
The government has failed to control current expenditure as all the ministers have spent million of rupees on the renovation of their offices despite financial constraints and Pakistan has to knock the door of IMF and donors for assistance and loan. Pakistan requires additional budgetary resources both from multilateral as well as bilateral donors to provide social safety net and development spending keeping in view tight fiscal position for the current as well as next financial year (2009-10).
As many as 170 projects are facing delay due to lack of management capacity and 73 projects for delay in fund releases. Contractors'' inefficiency is causing delay in implementation of 60 projects, 16 projects for land acquisition problems, nine projects for poor law and order situation, eight projects due to lack of co-ordination between federal and provincial governments and five projects facing delay due to loan disbursement.
The Planning Commission has already excluded 125 projects from monitoring network and has revisited monitoring targets from 705 projects to 580 projects for the current financial year. The commission reduced projects from 205 to 150 for monitoring in infrastructure sector, 300 to 250 projects in social sector, and 300 to 250 projects in other sectors. The monitoring of the projects helps in timely implementation of the projects.