ISLAMABAD: The ministries demanded Rs2.9 trillion development budget, whereas, the federal government has approved Rs1.100 trillion under the Public Sector Development Programme (PSDP) 2024-25.
The ministries made this demand during a meeting of the Prime Minister’s Committee for Planning and Execution of Foreign-Funded Development Projects chaired by Federal Minister for Planning Ahsan Iqbal, here on Thursday.
The minister directed the Economic Affairs Division (EAD) to come up with a realistic demand of budget in consultation with respective ministries/divisions which will be deliberated with Ministry of Finance to arrange required funds for development projects.
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The committee, discussed in detail, the planning and execution of foreign-funded projects and the need to refine policy guidelines in line with the Economic Coordination Committee (ECC)’s decisions.
During the briefing, it was highlighted that the challenges posed by scarce resources and huge demand for development projects need to be addressed during the financial year.
The PSDP currently stands at Rs1,100 billion, with an allocation of Rs220 billion in foreign funding as rupee cover.
The financial constraints have led to a 10 times increase in the throw-forward, alongside administrative and implementation challenges.
The minister highlighted that over the past years, the pie of development portfolio is squeezing contrary to increasing demand for development infrastructure.
Moreover, adjustment of fiscal targets the development budget is shrinking.
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He stressed the importance of preparing plans that address the minimum essential requirements of ministries to ensure timely disbursement of funds.
He emphasised that all projects should demonstrate robust economic and financial rationale, given the current balance of payments challenges.
He also called for the establishment of a mechanism to reduce financial burdens and ensure practical implementation.
Iqbal added that all PSDP projects, including foreign-funded initiatives, need execution within the specified timelines and clear ownership to avoid cost and time overruns.
He stressed the importance of carefully managing economic and financial risks associated with foreign-funded projects, as exchange rate fluctuations can significantly impact loan repayments, increasing the burden on government finances.
Secretary Planning Awais Manzur Sumra, Secretary Economic Affairs Division (EAD), Member Infrastructure, Waqas Anwar and senior officials from the Ministry of Planning attended the meeting. Federal Minister for EAD Ahad Cheema participated via video link.
Copyright Business Recorder, 2024