The International Monetary Fund (IMF) has called on Pakistan to reassess its Public Sector Development Programme (PSDP) for the current fiscal year and stop funding provincial projects with federal resources.Â
The IMF’s concern over federal funding for provincial projects is tied to the 37-month EFF agreement, which has yet to receive approval from the IMF’s executive board.Â
The PSDP for 2024-25 includes 66 projects for Punjab worth Rs175 billion, 64 projects for Sindh valued at Rs488 billion, 111 projects for Balochistan totaling Rs429 billion, and 20 projects for Khyber Pakhtunkhwa worth Rs72 billion.
According to a news report, the government has responded by deciding not to release funds for non-priority projects, despite their allocations in the budget, Secretary of Planning and Development Awais Manzur Sumra informed the Senate Standing Committee on Planning, Development, and Special Initiatives.Â
Originally set at Rs1.4 trillion, the PSDP budget was revised down to Rs1.1 trillion due to fiscal constraints. Priority is being given to core, foreign-funded, and near-completion projects, while less important initiatives may face delays or cancellations.
The Finance Division outlined a strategy for development fund disbursements, with 15% allocated for the first quarter, 20% for the second quarter, 25% for the third, and 40% for the fourth quarter. A total of Rs155 billion has been authorised for release in the first quarter, with Rs31 billion allocated for schemes under the Province and Special Areas head.
During the meeting, the committee voiced concerns over the complex fund allocation process and requested a province-wise breakdown of quarterly disbursements under PSDP 2024-25.
