Move to cut development funds by over Rs250bn4 min read

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ISLAMABAD: While protecting the China-Pakistan Economic Corridor (CPEC) and other strategic development projects, the Pakistan Tehreek-i-Insaf government is working on scaling down federal development programme to about Rs775 billion from Rs1,030bn set in the budget 2018-19.

This would provide about Rs250-255bn or 25 per cent saving to the government, a senior official told Dawn. In the first 65 days of the current financial year, the Planning Commission has released Rs35bn for the development projects, about 75pc lower than Rs135bn in the same period last year.

A part of the saving would be used to increase allocations to the water sector projects on top priority and the remaining would be set aside for deficit financing, the official said. An amount of Rs80bn has been allocated for the water sector in the budget which was being felt insufficient in view of emerging challenges in the sector.

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The official said the most of the non-development projects included by the Pakistan Muslim League-Nawaz in the Public Sector Development Programme 2018-19 would face major the cut.

On the other hand, the new government is expected to include some of its own priority projects in the development programme.

The official said the Planning Commission had completed the process of sectoral presentations and briefings to Minister for Planning and Development Makhdoom Khusro Bakhtiar on Friday and dedicated teams were now working on crystallising the readjustment in the PSDP during the weekend.

Also Read: Development spending comes under the axe as deficit grows

The official said the Planning Commission would hold a meeting with the finance minister in a couple of days so that a comprehensive position could be presented to the prime minister next week to help him in decision making and redefining development goals.

Giving an example of non-development projects, the official said the previous government had made an allocation of Rs10bn under a youth initiative to provide laptops etc to the young while another Rs5bn was earmarked for gas schemes.

Likewise, many schemes were included in the PSDP on the basis of announcements made by the previous prime ministers during their visits to different cities and districts, on political basis. Such projects would be moved out of the PSDP.

Replying to a question, the official said it would not be a problem for the new government to slash PSDP size in view of very slow disbursements so far during the year owing a caretaker government in the office which kept releasing funds for strategic projects but did not allow funds for unnecessary projects.

He said the core development projects were given Rs23bn in the first 65 days of the current year as of Sept 7, showing about 67pc slow progress when compared to Rs70bn during the same period last year. Total +disbursements this year stood at Rs35bn as of Sept 7 compared to Rs135bn of the same period last year.

Minister for Planning Khusro Bakhtiar on Friday reviewed the progress of some of the CPEC projects and told the participants of the meeting that robust development of Gwadar under the CPEC was a top priority of the new government with a special focus on rapid industrialisation in the strategically located port city.

The meeting that also reviewed Gwadar Smart Port City Master Plan was attended by the secretary of planning, project director of the CPEC and officials from the government of Balochistan and Chinese companies.

Mr Bakhtiar said the government could not afford to wait any longer as the economy did not have the luxury of time. “Industrialisation in this port city is a low hanging fruit, considering its prospect of international connectivity and suitable cost of transportation”, he said.

“We need to structure the Gwadar Industrial Zone with incentives that yield high rate of return,” he said while emphasising on an industrialisation model that should have an inclusive nature vis-a-vis private sector.

The minister said development of Gwadar was a short-term target, but the area had a big potential to become a unit for export and get best out of blue economy.

He said Gwadar would be transformed into a transhipment hub to explore opportunities of blue economy as all prerequisites were in place there, but it was important to include provision of water, energy, road and railway connectivity as top priority.

(This news/article originally appeared in DAWN on September 8th, 2018)

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