Govt. trying to cut down PSDP by Rs 100 billion

[Naveed Yaseen]

ZAHEER ABBASI
ISLAMABAD (August 25 2008): The Planning Commission and the Finance Ministry are on a collision course over the announcement by the Finance Minister Naveed Qamar that the Public Sector Development Programme (PSDP) would be slashed by Rs 100 billion; the controversy is likely to continue.

Finance Minister Syed Naveed Qamar, while talking to a selected group of journalists, had stated that the slash was necessary to sustain the budget deficit of 4.7 percent as envisaged.

The same day, a senior official of the Planning Commission contradicted the finance minister and claimed categorically that there was no such proposal to cut down PSDP. He, however, said the PSDP funds utilisation was being made more effective to make sure that the funds are used in a judicious manner.

He said the project executing agencies from now onwards have been asked to submit cash plans in advance to secure funds for any development projects. The project executing agencies have been directed in writing to submit cash plan to the Planning Commission for each case for assessment, justifying prudent utilisation of the funds.

He said the new formula for release of funds under the PSDP is meant to ensure that each penny of the public money is used effectively and judiciously to achieve the end result.

He confirmed that over 1,000 cash plans had been submitted by the project executing agencies by mid-August, and it would ensure timely release of funds for selected projects.

He dispelled the impression that any downward revision has been done in the PSDP size, saying the overall volume of development programme will remain at Rs 541 billion. The National Economic Council (NEC) had approved the same size for this year's development programme on June 2.

The official said: "The impression of downward revision in the PSDP size is incorrect. The purpose of introducing the new formula based on cash plan is to seek a kind of guarantee from the executing agencies that they would utilise the funds judiciously."



The total size of the PSDP for ongoing fiscal is Rs 541 billion and this, according to Planning Commission sources, was not being reduced; only the funds release was linked with cash plans to ensure transparency and make the ministries and divisions more responsible.

Over 1,000 ongoing and 300 new development projects were approved under PSDP for 2009 an amount of Rs 541 billion earmarked to undertake these projects. An amount of Rs 24.6 billion was earmarked for projects for education sector, Rs 123.83 million for Ministry of Labour and Manpower, Rs 334.630 million for Women Ministry, Rs 20.515 billion for Agriculture and Livestock Division, Rs 28.79 billion for Cabinet Division, and Rs 850 million for Petroleum and Natural Resources Division.

Similarly, an amount of Rs 108.135 million was allocated under PSDP for Local Government and Rural Development, Rs 2.381 billion for Law, Justice and Human Rights Division, Rs 769.578 million for Textile Industry Division, Rs 4.070 billion for Housing and Works Division, Rs 11.114 billion for Planning and Development Division, Rs 2.370 billion for Revenue Division, Rs 5.0752 billion for Finance Division, and Rs 4.315 billion for Population Welfare Division.

The Information Division was allocated Rs 1.038 billion while Rs 1.045 billion was allocated for Industries, Rs 12 million for Economic Affairs Division, Rs 3.015 billion for Science and Technology, Rs 33.920 million for Youth Affairs Division. Railway was to get Rs 11.280 billion, Narcotics Control Division Rs 768.02 million, IT and telecommunication Rs 1.976 billion, and Communication Division Rs 36.821 billion.

Water and Power Sector was allocated Rs 67.679 billion, Atomic Energy Rs 15.330 billion, Finance Division Rs 50.752 billion, Health Rs 19.010 billion, Interior Rs 6.942 billion, and Cabinet and Defence divisions Rs 2.879 billion and Rs 4.939 billion, respectively.

The allocated amount in PSDP will be released to the ministries and divisions during 2008-09 in four equal instalments with 25 percent funds in each quarter.

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