Prime Minister Yousuf Raza Gilani has directed the Finance Ministry and the Planning Commission not to resort to cut in development funds earmarked for projects under Multan and Larkana packages, Business Recorder has learnt. The development budget for education sector may also be exempted from reduction due to government's priority to the sector.
The Planning Commission is currently working on prioritising projects in consultation with all ministries and divisions and has directed them to provide lists of prioritised projects to be continued after reducing Public Sector Development Programme (PSDP) 2009-10.
"The Prime Minister has barred the Planning Commission from putting any project under packages in the list of deleted projects after rationalisation of PSDP," sources added. Sources said the Prime Minister had sought details of all the projects under Multan and Larkana packages before giving approval to a summary moved regarding the proposed cut in PSDP. Multan package envisages Rs 38.180 billion and Rs 9.6 billion earmarked for the Larkana package.
"The Prime Minister does not want deletion of any project under these two packages," sources said, adding that different options have been tabled before the Prime Minister to effect a cut in PSDP. The Finance Ministry wants to reduce PSDP from Rs 446 billion to Rs 250 billion. "But the Planning Commission wants to keep the size of PSDP at Rs 285 billion," sources maintained. The Prime Minister is expected to approve reduction in PSDP in a couple of days," sources said.
The government has been forced to slash PSDP spending due to the non-materialising of pledges made by the Friends of Democratic Pakistan (FoDP), the US failure to release the promised assistance under Coalition Support Fund and hike in expenditure due to on-going military operation in Waziristan.
The Finance Ministry has also estimated huge expenditure worth Rs 213 billion on account of war against terror for 2009-10, which will be absorbed by slashing PSDP. The government has also revised upwards the expenditure on defence services from Rs 343 billion to Rs 378 billion due to on-going military operation, sources added.