Prime Minister releases government funds for “Electioneering”
APCC approves 3.5% GDP growth and a 31% increase in the federal development budget, which totals Rs950b.
ISLAMABAD:
On Friday, the Pakistan Democratic Movement government decided to increase the federal development budget for the next fiscal year by 31%, to Rs950 billion, in anticipation of the next general elections.
Prime Minister Shehbaz Sharif decided minutes before the Annual Plan Coordination Committee (APCC) meeting to enhance the Public Sector Development Programme (PSDP) from the previously budgeted Rs700 billion to Rs950 billion.
There was no mistaking the misunderstanding. Based on the PSDP amount of Rs700 billion, the Ministry of Planning disseminated a working paper from the APCC to all relevant parties. However, Minister of Planning Ahsan Iqbal told the media that the PSDP will be Rs950 billion in size, not counting the private sector’s contribution of Rs150 billion.
Therefore, the APCC suggested that the federal government and the four provinces spend a total of Rs2.5 trillion on national development. The Rs2.5 trillion budget is a 4% increase over the current fiscal year, an increase of Rs90 billion.
The APCC also approved a 3.5% GDP growth objective for the fiscal year 2023-24, broken down as follows: 3.5% growth in agriculture; 3.4% growth in industries; and 3.6% growth in services. For the upcoming budget year, we’re aiming for an inflation rate of 21%.
The APCC gave its stamp of approval to a federal development budget of Rs950 billion, an increase of Rs223 billion, or 31%, from the budget proposed earlier this year. The Planning Ministry vigorously opposed the Rs700 billion ceiling approved by the Finance Ministry.
According to Iqbal, the PSDP is a great way to allocate limited government funds to high-impact areas. According to him, the PSDP 2023-24 prioritizes development projects related to the 5Es framework (exports, equity, empowerment, environment, and energy); CPEC; and the 4RF framework (resilient, recovery, rehabilitation, and reconstruction) in the wake of the catastrophic flood of 2022.
Over Rs2.6 trillion was requested by various ministries for 2,035 projects with a Rs8 trillion throw-forward under the PSDP 2023-24. The International Monetary Fund placed the amount of time added to the current calendar to finish the authorized projects at Rs12 trillion.
The APCC also approved development spending of Rs1.56 trillion for the four provinces. The Punjab and Khyber-Pakhtunkhwa interim governments have recommended reduced development funding till October 2023.
The National Economic Council will be presented with the proposed budgets next week for approval. Shehbaz Sharif, as Prime Minister, presides over the National Economic Council (NEC), the constitutional body responsible for making economic decisions.
All Rs1.559 trillion would come directly from the four provinces. The planned four-month development budget of Rs426 billion in Punjab is much less than this year’s revised forecasts of Rs712 billion.
A massive 40% increase from this fiscal year’s budget of Rs442 billions has been allocated to Sindh for the upcoming election.
Khyber-Pakhtunkhwa reduced their development spending budget from this year’s revised total of Rs373 billion to Rs268 billion for the first four months. The projected development budget for the next fiscal year in Balochistan is Rs248 billion, a 65% increase over the revised estimates for the current fiscal year.
This fiscal year, legislators’ plans received Rs111 billion; next year, they will only receive Rs90 billion. There are a number of problems plaguing the federal government’s development portfolio as a result of insufficient funding, inadequate planning, management, and execution.
As a result of shifting objectives, the coalition government made significant revisions to the development budget for this year. The government agencies reallocated Rp 64 billion from one project to another, while Rp 75 billion was obtained in additional funding.
This year’s PSDP had Rs12 billion redirected to fund the 7th Population and Housing Census. Similarly, the Ministry of Maritime Affairs recalculated the cost of providing 2000 engines to low-income fisherman in Gwadar from Rs8 billion to the present side.
The Ministry of Planning estimated that by the conclusion of the current fiscal year, 164 projects totaling Rs294 billion would be finished.
With the provincial share of nature projects rising to 31% of the total federal PSDP, scarce funds have been further spread thin.
Earthquake Reconstruction and Rehabilitation Authority back payments were still an open question. The federal government has granted annual funds to the APCC in the amount of Rs180 billion through FY-2022-23. Liabilities were accruing during the period since the ERRA was unable to complete its tasks in time. Although the government planned to implement the 2018 merger of ERRA and the National Disaster Management Authority, this has not happened.
Guidelines for dealing with these problems were also established by the APCC. It suggested that only state programs with at least 50 percent provincial funding should be supported.
In addition, it was suggested that the Planning Ministry get 40% of the overall PSDP over the course of four quarterly installments, rather than just 10% in the first quarter. The APCC has proposed removing the limit on procurement and other austerity measures affecting development spending, as well as providing foreign exchange protection wherever needed.
In addition, the government has requested that the interest on cash development loans issued to the Pakistan Atomic Energy Commission, the Power Division, and the National Highway Authority be waived.
The APCC pushed for a prohibition on using development money for operational costs.
