Federal government decides to slash PSDP by Rs 400 billion: Sources

Federal government decides to slash PSDP by Rs 400 billion: Sources

ISLAMABAD - The government is planning to slash the current fiscal year’s Public Sector Development Program (PSDP) to Rs600-Rs650 billion from Rs1,030 billion, sources said on Tuesday.

Prime Minister Imran Khan has asked the Planning Commission to present the revised PSDP document before the Parliament in the next few days for approval.

The Ministry of Finance would propose slashing down the development budget, as all budgetary targets would be revised in a major way to bring down the budget deficit, which peaked to Rs2,260 billon or 6.6 percent of GDP in the last fiscal ended June 30, 2018.

In the PSDP for 2018-19 approved by the National Economic Council (NEC) during the last Pakistan Muslim League-Nawaz (PML-N) led regime, the Planning Commission inserted around 400 to 450 unapproved schemes as part of the PSDP.

It was argued at that time that with approval of NEC it was made part of rules in 2004 that no projects would be approved without securing its resources, after which the Planning Commission used to entertain PC-1 of only those projects which were already made part of the PSDP list.

In a unique but rare episode, it was admitted at the highest levels that there was difference between Finance Ministry’s allocated amount for PSDP in pink book and green book of PSDP published by the Planning Commission.

The Finance Ministry mentioned allocation of Rs800 billion in the Pink Book of Budget for 2018/19, but the Planning Ministry showed allocation of Rs1,030 billion in the Green Book of PSDP. “Now the allocation amount will be further slashed down into fresh PSDP and it will stand at Rs600 to Rs650 billion maximum,” added the sources.