The federal budget has projected an amount of over Rs 1.14 trillion that is to be spent on development projects across different industries and sectors. The amount is a significant increase from last year when the federal budget for development projects had just been Rs 727 billion.
This means that the budget given to the Federal Public Sector Development Program (PSDP) has increased by over 30 percent. Normally, election years are a free for all in terms of development budgets as outgoing governments try to increase their popularity by spending money on projects that will provide relief to the public. This year, however, the government is trying to play a dangerous game of balancing the political needs of an election year budget and requirements of the International Monetary Fund (IMF) which wants Pakistan to cut back on spending.
The PSDP is an important part of public sector investment, which channels domestic and foreign resources to implement development programmes and projects prepared by the federal, provincial and local agencies. Essentially, it is the vehicle that the federal government has to spend on the people. In the current budget, Rs 1.14 trillion has been allocated for the PSDP.
What is the government planning to spend on?
As per the budget documents, in the budget of fiscal year 2023-24 at least Rs485 billion has been allocated for federal ministries and departments. For corporations including NHA, WAPDA etc the government has allocated Rs 215 billion in this budget as compared to Rs 176 billion in the outgoing financial year.
For provincial projects under the federal government Rs 42 billion have been allocated. Rs 61 billion are allocated for special areas including AJK and GB whereas Rs 57 billion are fixed for merged areas of KP.
The government has allocated Rs 90 billion for SDGs achievement program making it Rs 950 billion under the federal development program. The government has also allocated Rs 200 billion for projects to be executed or completed under PPP/BOT mode which added the total development portfolio of the center to Rs 1150 billion.
Sectoral Strategy for PSDP 2023-24
As per the budget book, priority has been assigned to Infrastructure sector being the primary responsibility of the Federal Government with over 52% of the allocations of Rs. 950 billion, followed by Social Sector having 25.5% and balanced regional development (AJ&K, GB and Merged districts of KP) with 12.5%.
About 10% resources are earmarked for Other Sectors like IT & Telecom, S&T, Governance and Production sectors etc. SDGs Achievement Program has been allocated funds of Rs. 90 billion (10%) to supplement efforts of provincial governments to bring at grassroots community based development.
Within Infrastructure, major chunk of the allocation has been earmarked to (a) transport and communications with 28% for ongoing mega projects of NHA, Railways, Maritime Affairs, Defence Production and CPEC related projects (b) water resources with 10.2% for large multipurpose dams particularly Diamer Bhasha, Momand, Dasu Dams, K-IV etc and drainage projects (c) energy with 9% for power evacuation, expansion and improving transmission lines and distribution system as well as to operationalize SEZs projects.
Social sector will receive Rs. 241.9 billion (25.5%) for health, education, higher education, population welfare, governance and special programmes. Substantial funds have also been made available within the limited space to foster the culture of innovation and research in the sectors of Information Technology and Science & Technology.
As per the budget book, priority in allocation has also been assigned to the food & agriculture sector to ensure food security through productivity enhancement measures in the country.
Populist initiatives
- Solar Tube Wells
- Youth Program for Small Loans
- Pakistan Fund for Education\
- Support for IT Start-ups and Venture Capital
- Women Empowerment
- Laptop Scheme
- Youth Skill Development
- Establishment of National Fund for Addressing the Crisis of Out of School Children
