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Express Tribune
4 hours ago
- Business
- Express Tribune
Development budget likely to top Rs4tr
Listen to article The government is set to approve a record Rs4.1 trillion national development budget for the Centre and provinces amid scarcity of resources that has compelled it to ban small-scale projects and not to include federally-funded province-specific new schemes for next year. Despite the threat of blocking water by India, the government has proposed to reduce the water sector allocation by 45% or Rs119 billion to just Rs140 billion for the fiscal year 2025-26 against the originally approved budget. Yet, the proposed federal Public Sector Development Programme (PSDP) reflects the coalition government's political priorities, with hefty allocations for road infrastructure, while funding for education, health, and water has been significantly slashed for the fiscal year 2025-26. The Annual Plan Coordination Committee (APCC) will today (Monday) approve the national development budget outlays for the federal government, four provincial governments and the special areas of Pakistan. Planning Minister Ahsan Iqbal will chair the meeting, which will also recommend 4.2% economic growth and 7.5% inflation targets for the next fiscal year. The federal PSDP has been finalised by a committee constituted by Prime Minister Shehbaz Sharif aimed at accommodating the needs of the coalition partners. The APCC will approve a cumulative Rs4.1 trillion outlay for development, which will be Rs300 billion or 8% higher than this fiscal year's original budgets approved by the National and four provincial assemblies. There has been a reduction in the federal PSDP, but the four provincial governments will cumulatively spend 28% higher than this year's budget from their own resources. Provinces are rich, thanks to the ill-planned National Finance Commission award of 2010. The APCC will approve Rs1 trillion federal PSDP, down by Rs400 billion compared to this fiscal year's original budget approved in June last year. The federal government will borrow Rs270 billion from abroad to fund this Rs1 trillion spending. The four governments plan to spend Rs2.8 trillion, higher by Rs609 billion or 28% over this year's original budgets. The provincial governments will also borrow Rs802 billion from abroad to fund their projects. Another Rs288 billion will be spent by the government-owned companies outside the federal budget. Punjab is on a spending spree, as it plans to spend Rs1.19 trillion, which is higher by Rs346 billion or 41% over this fiscal year's budget. Khyber-Pakhtunkhwa will follow Punjab with Rs440 billion spending, also higher by 63%. Sindh government plans to spend Rs887 billion, higher by Rs60 billion or 7%. The Balochistan government is proposing Rs280 billion for development, which is higher by Rs32 billion over the originally approved budget. 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. The government admits that Pakistan, withan IMF programme, undergoes some limitations and thus the challenge ahead is to leverage the limited resources in a way to achieve maximum returns from each project to satisfy goals and objectives outlined in the national economic transformation plan, the 5Es-based five-year plan and the "Uraan Pakistan Programme" while overcoming challenges. There are also implementation issues, and during recent reviews, the planning ministry had identified 183 projects, mostly at the DDWP level, as problematic and slow-moving. It has been recommended to cap or close all these projects by June 2025. By capping or closing such projects, around Rs1 trillion could be saved and fiscal space could be created for fast-moving ongoing projects as well as new high-impact priority projects, according to a proposal to the APCC.
Express Tribune
a day ago
- Business
- Express Tribune
Govt considers levy on gasoline-powered cars to promote EVs
The federal government is likely to impose a five-year levy on vehicles powered by petrol and diesel in the upcoming fiscal year 2025-26 budget to promote electric vehicles (EVs) and has decided to establish an EV Fund to support the transition toward electric mobility. Sources said that if approved and implemented, this levy could generate annual revenue of Rs25-30 billion, amounting to Rs125-150 billion over the next five years. The collected revenue would be used to finance the new five-year Electric Vehicle Policy for 2026-30 and would be imposed on both imported and locally manufactured petrol and diesel driven vehicles. Meanwhile, the International Monetary Fund (IMF) has raised concerns about the government's proposal to provide idle electricity for Bitcoin mining and artificial intelligence operations, according to sources in the Finance Ministry. The IMF has sought an explanation for not being consulted on the use of electricity for Bitcoin mining and AI, as well as on electricity tariffs. A virtual discussion is scheduled with the IMF delegation specifically regarding electricity supply for Bitcoin mining. The IMF has also asked for clarification on the allocation of electricity for cryptocurrency operations, particularly since crypto remains unregulated in Pakistan. The IMF has insisted that all decisions under the loan programme be made with prior consultation. Sources confirm that Pakistan's economic team is facing tough questions during budget negotiations, and further hard discussions with the IMF regarding electricity supply initiatives are anticipated. According to sources, many key economic targets in the budget proposals have already been finalised in consultation with the IMF, while discussions on other areas are ongoing and expected to conclude in the coming days. It has also been proposed to offer incentives for the local manufacturing of laptop and smartphone batteries and chargers. Sources added that virtual consultations with the global lender are ongoing regarding budget proposals for the upcoming fiscal year, with an outcome expected soon. The draft budget will likely be finalised next week. Both Pakistan and the IMF have agreed to continue virtual talks on all outstanding matters. In the federal budget for fiscal year 2025-26, the government is likely to set a GDP target of 4.2%, an inflation target of 7.5%, an agricultural growth target of 4.5%, an industrial growth target of 4.4%, and a services sector growth target of 4%. The Annual Plan Coordination Committee (APCC) will convene on June 2 to finalise the Public Sector Development Program (PSDP) and the annual development plans. Later that same week, a key meeting of the National Economic Council (NEC), chaired by the prime minister, will be held where approval will be sought for the PSDP, annual development plans, and the Medium-Term Budgetary Framework proposed by the APCC. If adjustments or increases in funding for development projects are required, the NEC will approve them. The Economic Survey, detailing the performance of the current fiscal year, will be released on June 9. The federal budget will be presented in parliament the following day, June 10, after its approval by the federal cabinet in a special session.
Business Recorder
a day ago
- Business
- Business Recorder
PM says issues facing Balochistan will be resolved
QUETTA: Prime Minister Muhammad Shehbaz Sharif Saturday said the issues faced by the people of Balochistan would be resolved amicably and funds would be made available for the development and progress of the largest province. Addressing a grand Jirga of Balochistan here, he said all provinces were like brothers and would equally share resources of the country. The federal government was spending Rs 70 billion on the solarisation project in Balochistan, he said, adding Rs 150 billion would be diverted for the building of highway N25 in Balochistan. These funds would be acquired from the amount which the government was collecting after the lowering down of prices of petroleum products in the international market. India has intensified 'terrorism campaign' inside Pakistan through proxies, says PM Shehbaz The prime minister said the government would allocate Rs 1000 billion for the Public Sector Development Programme (PSDP) this year and 25 percent or Rs 250 billion from the fund would be for projects in Balochistan. He said federal funds were the right of people of Balochistan and every penny would be spent transparently on the progress and prosperity of the province. As chief minister of Punjab, he said, he has allocated ten percent quota for the students of Balochistan in different schemes of Punjab including laptop schemes and scholarships in the foreign and provincial educational institutions. In the past, Rs two billion were allocated for a heart hospital in Balochistan, he continued. He recalled that Punjab had agreed to give part of its funds from the National Finance Commission (NFC) Award to Balochistan in view of its development needs as the province had a larger area. In today's value, the funds diverted to Balochistan amounted to Rs 160 billion, he explained. The NFC award was signed in Lahore in 2010 after three days of discussions among the national leadership including President Asif Ali Zardari, the then prime minister Syed Yousaf Raza Gilani and Nawaz Sharif, he added. He said in the tenure of Nawaz Sharif lot of development projects were undertaken in Balochistan and President Zardari initiated Aghaz-e-Haqooq-e-Balochistan. He said the elders of Balochistan decided to become part of Pakistan under the leadership of Quaid-e-Azam Muhammad Ali Jinnah. Talking about incidents of terrorism in Balochistan, he said terrorists were blood thirsty and were against the progress of Pakistan and were undertaking heinous acts at the behest of foreign elements. He said terrorists in Balochistan were foreign agents who had resorted to barbarity but they would not be tolerated by the government and armed forces of Pakistan. He assured that social and economic justice would be delivered to the people of Balochistan. Referring to the latest incidents in Sorab, he said the country could not make progress without peace. Talking about conflict with India, he said on the midnight of May 6 and 7 and May 10 India attacked Pakistan but with the grace of Allah, the armed forces of Pakistan bravely defeated the enemy, who will remember its failure forever. He thanked people of Pakistan for showing unity and standing with the Pakistan army shoulder to shoulder during the conflict. As prime minister he was witness to all the events of the short duration war, he said adding as a brave and sagacious leader Field Marshal Syed Asim Munir led Pakistan armed forces to a victory against India and made the nation proud and the success was akin to avenging the events of 1971. He said now the enemy was scared and the friendly countries were more confident after success of Pakistan. He recalled that Pakistan conducted six nuclear explosions in response to five detonations of India in 1998, adding Nawaz Sharif was leader of the nation on that momentous occasion, which fortified the defence of Pakistan. Field Marshal Chief of Army Staff Syed Asim Munir, Acting Governor Balochistan Governor Abdul Khaliq Achakzai, Chief Minister Balochistan Mir Sarfraz Bugti and high ranking military and civil officials attended the event. Prime Minister Muhammad Shehbaz Sharif Saturday stressed that the threats faced by Pakistan were no longer confined to conventional warfare and highlighted the need for preparedness across multiple domains. He was addressing officers at the Command and Staff College here. Joined by Chief of Army Staff Field Marshal Syed Asim Munir, Balochistan Chief Minister Mir Sarfraz Bugti, Federal Ministers Ahsan Iqbal and Attaullah Tarar, Balochistan Corps Commander Lt Gen Rahat Naseem Ahmed Khan, and DG ISPR Major General Ahmed Sharif Chaudhry, the Prime Minister outlined a comprehensive vision for national resilience. 'Pakistan's threats are no longer limited to traditional warfare,' said PM Sharif. 'Our military, political, and economic institutions must be equally prepared to face hybrid challenges, from border security to economic sabotage.' He paid tribute to the Pakistan Armed Forces for their valour and professionalism, citing the response to the Pulwama incident as an example of national strength. 'While India targeted innocent civilians, our Air Force responded with precision, striking seven high-value targets,' he said, adding that the incident proved Pakistan's operational readiness on land and in the air. The Prime Minister strongly criticised India's propaganda and its attempt to weaponize events like the Pulwama attack. He emphasised that Pakistan responded firmly, diplomatically and militarily. 'India tried to make water a weapon, but we have drawn a red line. Pakistan will never allow its water rights to be violated,' he added. He praised the leadership of Field Marshal Asim Munir and Air Chief Marshal Zaheer Ahmad Babar for their strategic foresight, asserting that Pakistan's armed forces and people stand united against any aggression. 'The recent tensions have only boosted the morale of our nation and forces,' he remarked. He noted that when he assumed office for 16-month tenure, the country was facing severe challenges, but none were insurmountable. 'Our focus remains on the economy, reforms, and counterterrorism,' he said. He pointed to significant achievements since the beginning of economic reforms in March 2024. 'Tax revenue has increased by 28% compared to last year. The introduction of a faceless assessment system at Karachi Port has improved transparency. Inflation has dropped from 38% to single digits. The Pakistani rupee is now stable,' he added. Shehbaz Sharif also emphasized the government's zero-tolerance policy on corruption, crediting tough decisions and anti-smuggling measures for economic stabilization. 'We are introducing modern technologies, including crypto regulation and blockchain, to align Pakistan with the global financial landscape,' he announced. He reaffirmed Pakistan's strong ties with countries like China, Saudi Arabia, Turkiye, Qatar, and the Gulf states. 'Our strategic friendships have endured every test. These nations stood by us in our most difficult times,' he said. The Prime Minister called for collective national effort and hard work to join the ranks of great nations. 'Success comes from perseverance. Together, we will transform Pakistan into a model for the world,' he declared. Copyright Business Recorder, 2025
Business Recorder
2 days ago
- Business
- Business Recorder
Issues of Balochistan to be resolved amicably: PM Shehbaz
Prime Minister Muhammad Shehbaz Sharif on Saturday said the issues faced by the people of Balochistan would be resolved amicably and funds would be made available for the development and progress of the largest province. Addressing a grand jirga of Balochistan, he said the four provinces were like brothers and would equally share resources of the country. The federal government was spending Rs70 billion on the solarisation project in Balochistan, he said, adding Rs150 billion would be diverted for the building of highway N25 in Balochistan. India has intensified 'terrorism campaign' inside Pakistan through proxies, says PM Shehbaz The funds would be acquired from the amount, which the government was collecting after the lowering down of prices of petroleum products in the international market. The prime minister said the government would allocate Rs1,000 billion for the Public Sector Development Programme (PSDP) this year and 25% or Rs250 billion from the fund would be for projects in Balochistan. He said federal funds were the right of people of Balochistan and every penny would be spent transparently on the progress and prosperity of the province.
Express Tribune
2 days ago
- Business
- Express Tribune
Govt considers levy on gasoline-powered cars to promote electric vehicles
Listen to article The government is considering a five-year levy on all vehicles powered by petrol and diesel to promote electric vehicle (EV) adoption in the country. It has also decided to establish an 'EV Fund' to support the growth of electric transportation. The EV Fund will be set up to facilitate electric vehicle adoption, and a levy is proposed on all petrol and diesel vehicles—both imported and locally manufactured—for the next five years. If approved and implemented, this levy could generate annual revenue of Rs25–30 billion, amounting to Rs125–150 billion over five years. The collected revenue would be used to finance the new five-year Electric Vehicle Policy for 2026–30. Meanwhile, the International Monetary Fund (IMF) has raised concerns about the government's proposal to provide idle electricity for Bitcoin mining and artificial intelligence operations, according to sources in the Finance Ministry. The IMF has sought an explanation for not being consulted on the use of electricity for Bitcoin mining and AI, as well as on electricity tariffs. A virtual discussion is scheduled with the IMF delegation specifically regarding electricity supply for Bitcoin mining. The IMF has also asked for clarification on the allocation of electricity for cryptocurrency operations, particularly since crypto remains unregulated in Pakistan. The IMF has insisted that all decisions under the loan programme be made with prior consultation. Sources confirm that Pakistan's economic team is facing tough questions during budget negotiations, and further hard discussions with the IMF regarding electricity supply initiatives are anticipated. According to sources, many key economic targets in the budget proposals have already been finalised in consultation with the IMF, while discussions on other areas are ongoing and expected to conclude in the coming days. It has also been proposed to offer incentives for the local manufacturing of laptop and smartphone batteries and chargers. Sources added that virtual consultations with the global lender are ongoing regarding budget proposals for the upcoming fiscal year, with an outcome expected soon. The draft budget will likely be finalised next week. Both Pakistan and the IMF have agreed to continue virtual talks on all outstanding matters. In the federal budget for fiscal year 2025-26, the government is likely to set a GDP target of 4.2%, an inflation target of 7.5%, an agricultural growth target of 4.5%, an industrial growth target of 4.4%, and a services sector growth target of 4%. The Annual Plan Coordination Committee (APCC) will convene on June 2 to finalise the Public Sector Development Program (PSDP) and the annual development plans. Later that same week, a key meeting of the National Economic Council (NEC), chaired by the prime minister, will be held where approval will be sought for the PSDP, annual development plans, and the Medium-Term Budgetary Framework proposed by the APCC. If adjustments or increases in funding for development projects are required, the NEC will approve them. The Economic Survey, detailing the performance of the current fiscal year, will be released on June 9. The federal budget will be presented in parliament the following day, June 10, after its approval by the federal cabinet in a special session.
