The Finance Ministry has released Rs 120 billion for the ongoing development projects under Public Sector Development Programme (PSDP) during the first nine months (July-March) of the 2008-09 financial year. Sources revealed to the Business Recorder on Wednesday that the government had released Rs 49 billion in the third quarter (January-March) of the current financial year.
The Finance Ministry is still to release Rs 99 billion during the fourth quarter (April-June) of the current financial year for the ongoing projects under PSDP. The government released Rs 71 billion in first half (July-December) of the current financial year that was 19 percent of total funds allocation for development projects under the PSDP.
Some officials are of the view that even if the Finance Ministry releases Rs 99 billion, it would be difficult for the ministries to utilise the amount for the ongoing projects during the last quarter of the current financial year. Due to financial constraints, the Finance Ministry delayed the release of the funds that would create problems for ministries in their utilisation.
According to the sources, the government allocated Rs 371 billion in the Federal PSDP and Rs 170 billion for the provincial PSDP during the current financial year (2008-09). Later, it deducted Rs 34 billion, allocated for Benazir Income Support Programme (BISP) in the Federal PSDP and put it into recurring budget.
After deducting the amount of Rs 34 billion for BISP, the government allocation of Rs 337 billion in the Federal PSDP, after cutting Rs 118 billion due to financial constraints, has been reduced to Rs 219 billion. The Rs 118 billion cut in PSDP is Rs 18 billion higher than the announced cut of Rs 100 billion during the Prime Minister''s visit to the Planning Commission on February 13.
The financial constraints further compelled the government to cut the PSDP for current financial year. Due to financial constraints, the Planning Commission has also proposed that the provinces should generate funds from their own resources to complete the development projects, as the Federal government is faced with severe financial constraints. The Finance Ministry has proposed Federal outlay of Rs 255 billion for the PSDP in the 2009-10 financial year, which is Rs 116 billion less than that of current financial year.
The Annual Plan Co-ordination Committee (APCC) in the Planning Commission, scheduled to meet on May 21-22, will consider the said Federal component of PSDP and, in turn, recommend it to the National Economic Council (NEC) for approval. While the total demand from all ministries amounted to Rs 876 billion, the Planning Commission had recommended Rs 400 billion allocations as the Federal component of the PSDP for next financial year.
However, the Finance Ministry''s priorities committee is reported to have approved the Federal component in the PSDP, ranging between Rs 245 and Rs 255 billion, due to financial constraints and in an effort to meet the fiscal deficit target of 3.4 percent of the gross domestic product (GDP) committed to the International Monetary Fund (IMF) for the next fiscal year.