Planning ministry reviews PSDP projects
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Minister for Planning, Development and Special Initiatives Ahsan Iqbal on Saturday chaired a meeting to prioritise projects under the upcoming Public Sector Development Programme (PSDP) for fiscal year 2025-26.
Members of the Planning Commission and senior officials of the ministry briefed the minister about the priority projects in different sectors, a news release said. The meeting shows signs of resolve on the part of the government not to let anything derail Pakistan's development and economic growth agenda, and to continue working for economic transformation with enhanced efforts.
The meeting focused on prioritising essential development projects aligned with the Uraan Pakistan, 5Es National Economic Transformation Framework and how to address economic constraints. The minister emphasised the resolve of the government, saying, "Despite the challenges we face, our commitment to the growth of the country remains firm. We will not compromise on the betterment of our people and the progress of our nation."
Ahsan Iqbal also spoke about Pakistan's defence capabilities and economic stability. "While we are committed to peace, but let me be clear – Pakistan possesses a strong defence. We will not allow India to play havoc with efforts to stabilise our economy and pursue our development agenda. No challenge is too big when we have the determination to succeed."
The minister emphasised that the current and upcoming PSDP was completely aligned with the Uraan Pakistan initiative and prioritised the enhancement of productivity as defined in the framework based on 5Es – exports, equity & empowerment, e-Pakistan, environment & climate, and energy & infrastructure. "In prioritising critical development projects for the upcoming fiscal year, we are keenly focused on ensuring the continuity of essential initiatives, especially those that are near completion, those of strategic national importance and projects with allocated block funding. It is being ensured that approved projects for the coming year are adequately funded," he said.
Through a rigorous process of rationalisation and prioritisation, the Ministry of Planning, Development and Special Initiatives is working towards a development portfolio which enhances productivity and ensures impactful outcomes.
The projects included would be aligned with the vision of Uraan Pakistan and build vital infrastructure for enhanced productivity, invest in future of the country, provide essential operational support, develop human capital and strengthen Pakistan's soft power. Ahsan Iqbal said the challenges were immense, but the government was committed to continuing to focus on all areas for the well-being of the people of Pakistan.
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No fiscal space The federal and provincial governments are loosening their purses despite the country facing challenging economic conditions. The federal government, constrained by limited fiscal space, is once again allocating Rs1 trillion, even though it managed to spend only Rs600 billion during the first 11 months of the current fiscal year. The APCC will approve not to include any new provincial nature project in the PSDP due to fiscal constraints. It will also approve a moratorium on approval of up to Rs1 billion projects till completion of the IMF programme. However, an exception is also being proposed from the moratorium in case of "compelling conditions". Despite fiscal constraints, projects pertaining to devolved subjects and provincial in nature are still being financed under the federal PSDP. About 30-40% of PSDP goes to the provincial nature projects, which have seriously undermined the progress of mega and core projects of national significance, according to the planning ministry. The projects of national importance are delayed due to thin spread funding, and around 90% ongoing projects have been revised with cost increase and time overrun, it added. The APCC may also issue directions that the development funds should not be diverted to non-development purposes during the currency of the fiscal year. The APCC will review whether projects with high impact, focused on completion within 3-4 years, will be funded. The proposed PSDP gives priority to foreign-funded and core, and high-impact projects. However, a cursory look at the proposed PSDP suggests that despite tough economic conditions, the government has given importance to politically nature projects by increasing allocations for the National Highway Authority and the provincial nature projects. The allocation for the provincial projects has been proposed to be increased from Rs19 billion to Rs93.4 billion. Likewise, the NHA budget has been proposed to be increased to a whopping Rs229 billion, up by Rs49 billion or 27%. To make room for higher spending on political priorities of the coalition partners, the government has proposed to drastically reduce the funding of the water and power sector projects. The power sector budget is proposed to be reduced by Rs72 billion or 41% to Rs104 billion. The water sector allocation is proposed to be cut by Rs119 billion to just Rs140 billion. Diamer Basha dam project will get Rs35 billion in the next fiscal year compared to Rs40 billion this year, according to the sources. The federal ministry of education's budget has been proposed to be cut by 27% to Rs20 billion, while the Higher Education Commission's budget is proposed to be reduced by Rs21 billion or 32% to Rs45 billion. Despite challenges, the government has also retained a Rs50 billion allocation for the parliamentarians' schemes under the umbrella of the Sustainable Development Goals Achievement Programme. Around 1,071 development projects with a cumulative cost of Rs13.4 trillion are currently under implementation. They need another Rs10.2 trillion for completion, which the Planning Ministry states would take more than 10 years to complete. Compared to the original Rs1.4 trillion approved federal PSDP in the budget, the actual spending as of the end of May remained at Rs596 billion, which is hardly 43% of the parliament's approved budget. 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