Pakistan is likely to receive a meagre amount of $831 million against $2.3 billion expected inflows from Friends of Democratic Pakistan (FoDP) during the on-going fiscal year. Sources said so far $571 million have been received from FoDP while another $260 million are expected before the close of the on-going fiscal year.
These included $200 million from Saudi Arabia, $44 million from USAID, $7.5 million from Germany and $320 million from Islamic Development Bank. The government budgeted $2.3 billion for the on-going fiscal year. The total materialisation by the FoDP was $892 million, $50 million in 2008-09 and $831 million is likely to be received in the on-going fiscal year from total commitments of $5.2 billion made at donor conference in Tokyo in April 2009.
The pledges of $5.2 billion by the FoDP were to be materialised in two years and the government on expectation that half would come in 2009-10 budgeted $2.3 billion for the fiscal year. The poor response by the FoDP as well as escalating expenditure on war on terror and delay in reimbursement to Pakistan under Coalition Support Funds (CSF) claims by the United States have forced the government to readjust the Public Sector Development Programme.
They said the PDSP was reduced to Rs 250 billion from Rs 421 billion targeted in the budget. The inflows of the Kerry-Lugar package expected during the on-going fiscal year would provide some comfort to the economic managers which they hope would increase the total foreign inflows to $1.5 billion against $2.3 billion budgeted for the ongoing fiscal year.
The budgetary shortfall of $600 million to $800 million on account of poor external inflows may force the government take some additional revenue measures, however, a decision to this effect would be taken in the last quarter of the current fiscal year.
Sources in the finance ministry said because of the financial constraints, the government may not be able to fully implement the recommendations of the Pay and Pension Commission (PPC) with regard to increase in salaries of public sector employees which has already been put off till June 2010.