The Planning Commission has expressed serious concern over the rationalisation of Public Sector Development Programme for 2010-11, saying it may prolong period of economic slowdown and cause delay in overcoming energy and water shortage, it is learnt.
The government has reduced PSDP by Rs 100 billion for the current fiscal year citing financial constraints expected to negatively impact the government ability to meet the serious social sector and infrastructural deficiencies. The Planning Commission is concerned that rationalisation of the PSDP would slow down employment generation, affect poverty reduction and delay the achievement of the Millennium Development Goals, a document revealed.
The size of the PSDP, inclusive of local and foreign component, has been reduced from Rs 280 billion to Rs 180 billion for the current fiscal year. The reduction in PSDP, an official said, is likely to delay over 83 projects. The total releases of PSDP - local and foreign - stood at Rs 88 billion and Rs 15 billion respectively during the first seven months of the current fiscal year. Cut imposed on PSDP allocation for 2010-11 has impacted infrastructure projects to the tune of Rs 43 billion, social sector projects up to Rs 44 billion and other projects in agriculture and industries faced a reduction of Rs 5 billion. The infrastructure sector was the worst hit as PSDP for infrastructure related projects witnessed a decline of 40 percent.
The allocation of Rs 106 billion for infrastructure was reduced in the revised PSDP to Rs 63 billion. The allocation for water-related projects has been slashed to Rs 22 billion from Rs 33 and power sector to Rs 10 billion from Rs 12 billion. The allocation for NHA related projects has been reduced from Rs 38 billion to Rs 19 billion, and Railways from Rs 10 billion to Rs 4 billion. The other infrastructure projects would now get Rs 8 billion instead of the original allocation of Rs 13 billion.
Allocation for social sector witnessed a cut of Rs 44 billion - to Rs 84 billion from Rs 128 billion or a 34 percent decline. The HEC would get Rs 15 billion instead of Rs 16 billion, funding for health related projects has been reduced from Rs 14 billion to Rs 8 billion, education from Rs 5 billion to Rs 3 billion, special areas Rs 22 billion to Rs 21 billion, special programmes Rs 30 billion to Rs 16 billion and other social projects Rs 41 billion to Rs 21 billion.
Under the revised PSDP, allocation for Punjab has been reduced from Rs 45 billion to Rs 19 billion, Sindh from Rs 36 billion to Rs 15 billion and Khyber Pakhtunkhwa from Rs 18 billion to Rs 8 billion. However, allocations for projects in Balochistan at Rs 28 billion, Azad Jammu and Kashmir Rs 11 billion, Fata Rs 9 billion and Gilgit Baltistan Rs 13 billion have been kept at original levels and no cut was effected on the allocations.