ISLAMABAD: The Pakistan Tehreek-e-Insaf (PTI) government is aiming to slash federal development programme to around Rs775 billion from Rs1,030 billion set by the previous government in its budget for the financial year 2018-19.
This would provide cover to China-Pakistan Economic Corridor and other strategic development projects, reports Dawn.
And this move would allow the government to save around 25 percent or Rs250-Rs255 billion, a senior official said.
During the first two months of current FY19, the Planning Commission has disbursed Rs35 billion for development projects, around 75 percent lower than Rs175 billion in the corresponding period of 2017.
A chunk of this saving would be utilized to raise allocation to the water sector on a priority basis and the remainder would be kept for deficit financing, the official shared.
In the budget presented for FY19 by the previous government, Rs80 billion have been allocated for the water sector, which was deemed insufficient considering the challenges surfacing in the sector.
According to the senior official, many of the non-development projects included in the Public Sector Development Programme 2018-19 by the previous government would face an axe.
Besides, the newly installed PTI government is expected to add its own priority projects in the PSDP 2018-19.
Also, the official stated the Planning Commission had concluded the process of sectoral presentations and rundowns to Minister for Planning and Development Makhdoom Khusro Bakhtiar on Friday.
The official shared dedicated teams were presently working on crystallizing the revisions in the PSDP during the weekend.
Moreover, the official shared the Planning Commission will be holding a meeting with the finance minister in a few days’ time to ensure a detailed position could be put forth before the prime minister next week to aid in the decision making and redefining development goals.
Providing an example of non-development projects, the official stated the previous PML-N government had allotted Rs10 billion under a youth initiative to extend laptops to the young, whilst another Rs5 billion was allocated for gas schemes.
Similarly, various schemes added to the PSDP were made on basis of announcements made by previous prime ministers during their respective visits to different cities and districts on a political basis.
Henceforth, these kinds of aforementioned projects would be removed from the PSDP.
In a response to a query, the official shared it wouldn’t be an issue for the newly installed government to decrease PSDP size taking slow disbursements into consideration in the first two months of FY19.
This was largely due to an installation of the caretaker setup, which only disbursed funds meant for strategic projects but didn’t release for unneeded projects.
On Friday, Minister for Planning Khusro Bakhtiar evaluated the progress made by some of the CPEC projects and apprised the meeting participants development of Gwadar under CPEC remained the foremost priority of his government with a special concentration on rapid industrialization in the port city.
Also, the meeting talked about the progress of Gwadar Smart Port City Master Plan which was attended by the secretary of planning, project director of the CPEC and officials from the government of Balochistan and Chinese entities.
According to Mr Bakhtiar, the government couldn’t afford to wait any longer since the economy didn’t have the luxury of time.”
He added, “Industrialisation in this port city is a low hanging fruit, considering its prospect of international connectivity and suitable cost of transportation.”
And the Planning Minister said, “We need to structure the Gwadar Industrial Zone with incentives that yield a high rate of return.”
He stressed the industrialization model should have an inclusive nature vis-à-vis the private sector.
The development of Gwadar remained a short-term aim, however, the area possessed immense potential to become a unit for export and extract the best out of blue economy, said Mr Bakhtiar.
Furthermore, the planning minister shared Gwadar could be converted into a transhipment hub to search opportunities of the blue economy since all basics were in place there.
He added it was significant to include the provision of energy, road and railway connectivity and water as the foremost priority.
Slashing PSDP funds by 25% is right step, as part of austerity measures and can still give better results if spent honestly and efficiently. Even for the remaining 75%, a lot of home work needed to make it meaningful.Just to say as an example, PM has appointed a political figure as minister in Privatization Commission. What privatization commission performed / earned in the last ten years and what billions had been spent to keep it alive, may be dormant, is worth studying and move accordingly. Merely austerity measure for the Prime Minister office wont serve any purpose unless the whole public sector setup be slashed at least to the extent of 50%. Privatization Commission should be disbanded and only a desk be left with Ministry of Finance with 3/4 professionals to deal with its affairs, if there are any one.
It seems that people are living in fools paradise. Squeezing spending will squeeze the economy
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