Pak: Public Sector Development Programme gets Rs 549.7 bn

Islamabad: The budget for fiscal year 2008-09 envisages an allocation for Public Sector Development Programme (PSDP) which is higher than that proposed in the Annual Development Plan as prepared by the Planning Commission. This dichotomy is unprecedented and is surprising given the severe resource constraints that the country is operating within.

A total of Rs 549.7 billion is earmarked for Public Sector Development Programme (PSDP) 2008-09 compared to the originally proposed Rs 520 billion PSDP in the current fiscal year, as announced by Finance Minister Naveed Qamar in his budget speech.

The ADP envisages a total development outlay of 755.7 billion if injections to the following public sector corporations such as Wapda, CAA, KPT, gas companies and others are included.

Interestingly, the PSDP size as given in the Annual Development Plan (ADP) 2008-09 is Rs 541 billion if calculated without the allocation of Rs 26.7 billion for Earthquake Rehabilitation and Reconstruction Authority (Erra) in the next fiscal year compared to Rs 35 billion in the current fiscal year. There is confusion whether the development expenditure figure 549.7 billion revealed by the finance minister in his speech included the allocation of Erra.

According to ADP, the allocation for federal development programmes is Rs 371 billion in the next fiscal year against Rs 335 billion for the same in the current fiscal year. The allocation for provincial development programmes is Rs 170 billion in next fiscal year against Rs 150 billion in the current fiscal year.

The ADP worked out the operational shortfall at Rs 25 billion in the federal programmes and Rs 20 billion in the provincial programmes for next fiscal year. If the operational shortfall of 25 billion is deducted from federal programmes, the actual allocation comes to Rs 346 billion. Similarly, the operational shortfall of Rs 20 billion if deducted from provincial programmes, the actual allocation would come to Rs 150 billion.

The Planning Commission estimates suggest that PSDP size is at 4.4 percent of GDP with an increase of 11 percent over 2007-08. The Commission also estimated that net amount available during 2007-08 after accounting for the operational shortfall is Rs 300 billion.

Out of the net available amount, Rs 250-260 billion are expected to be spent during the current fiscal year. The Commission is of the view that provinces are likely to perform better and their expenditure may exceed Rs 150 billion.

Under the sectoral distribution of the PSDP 2008-09, an amount of Rs 165 billion or 44 percent of the total PSDP has been made for infrastructure, Rs 188 billion or 50 percent for social sector, Rs 18 billion or 4.8 percent for agriculture and industry.

The allocation for water resources in the next fiscal year is Rs 62.42 billion compared to Rs 63.5 billion in the current fiscal year. The power sector will get Rs 14.15 billion in the next fiscal year compared to Rs 20.6 billion in the current fiscal year.

Pakistan Atomic Energy Commission (Paec) will get Rs 15.3 billion in the next fiscal year compared to Rs 12.21 billion in the current fiscal year. Communication Division including NHA will get Rs 36.82 billion in 2008-09 compared to Rs 29.61 billion in the current fiscal year. Railways division will get Rs 11.28 billion in next fiscal against Rs 11.64 billion in the current fiscal year.