The federal government will release funds earmarked for those five ministries which have been shifted to the provinces subsequent to rationalisation of Public Sector Development Program (PSDP) 2010-11 necessary in the post-flood scenario.
"The Planning Commission and Ministry of Finance have started consultations with concerned Ministries to transfer funds to provinces," sources said, adding that the decision of how much funds for development projects will be transferred to provinces is pending a decision on rationalisation. "Concerned Ministries being transferred to the provinces have been directed to identify projects for which they would require funds on a priority basis," sources added.
The Ministry of Finance is proposing a 50 percent cut in PSDP, whereas the Planning Commission has proposed a 30 percent cut, based on an earlier Finance Ministry direction. The Finance Ministry has directed that all special development projects, including Balochistan, Northern Areas (NA), Azad Jammu and Kashmir (AJK), Multan and Larkana be continued.
"But the Planning Commission has challenged this directive if PSDP is slashed by 50 percent," sources said. The Planning Commission has already stopped releasing funds to Ministries and divisions for development projects till final decision of the Prime Minister on the percentage cut in PSDP 2010-11. The Planning Commission is currently releasing funds to Higher Education Commission (HEC), Azad Jammu and Kashmir (AJK) and special projects in Multan and Larkana. Ministries and Divisions have lodged strong protest with Planning Commission on the proposed cuts.