Planning Commission finalising 20 to 30% cut in development funds

[Naveed Yaseen]

By Ijaz Kakakhel
ISLAMABAD: Keeping in view the tight financial situation, Planning Commission has prepared a summary with 20 percent cut in Public Sector Development Programme (PSDP) for the year 2008-09, sources told Daily Times here on Wednesday.

In this regard a meeting of rationalisation of PSDP was held in the Planning Commission to find out ways to cut the actual size—Rs 541 billion— of PSDP. All the ministries and divisions were asked to prioritise their projects and forward the proposals to the Planning Commission.

Majority of the ministries/divisions have already sent their list of projects, sources added. This scribe was informed that some water related projects were being put aside from the PSDP in which initial investments are already done.

In the light of last three days meeting a summary is prepared that would be presented to the Prime Minister soon.

One official of the Planning Commission said that the government is likely to cut the size of PSDP by 20 percent while another claimed that it would be around 30 percent amid weak financial position of the country.

“The PSDP cut would not effect education and health sectors, as these are the priority areas for the government,” the sources informed.

However, the sources said that all the projects scraped from the PSDP would be transferred to the Infrastructure Project Development Facility (IPDF) for execution with the private sector investment. The IPDF is already negotiating with the private sector investors to undertake projects of national importance.

If the prime minister approves a 20 percent cut, then Rs 108 billion would be subtracted from the original PSDP and it would be reduced to Rs 433 billion. However, if the 30 percent cut is approved, then over Rs 162 billion would be deducted and the overall size of the PSDP would be Rs 379 billion.

For total 65 different agriculture related development projects, the government has allocated Rs 20.015 billion in the PSDP 2008-09. These projects are of crucial importance and their completion would greatly help in ensuring food security in the country.

Among the total 65 development projects 24 were declared by the Ministry of Food and Agriculture as “high priority” projects and total allocation for these in the PSDP was Rs 17.435 billion. However, a cut of Rs 2.904 billion was recommended and now allocation for these projects would be Rs 14.531 billion.

In category B, (medium priority projects) included 36 projects worth Rs 2.530 billion in the PSDP 2008-09. An amount of Rs 1.070 billion cut was recommended for these projects and now the total allocation for these projects is reduced to Rs 1.459 billion.

Category C (low priority / delayable project) consists only one project, namely “Improvement of Agriculture Livestock Market and Marketing System” with initial total allocation Rs 13.400 million. The official in the meeting informed that this has been reduced to Rs 5 million.

The fourth category D includes those projects, which are either to be completed as early as possible or would be wind up by December 2008. In this category there were four projects. Total allocation for these four projects was Rs 36.196 million, which is now reduced to Rs 16 million.

http://www.dailytimes.com.pk/default.asp...2009_pg5_2