• Overall development outlay slashed by 25pc to Rs3.218tr
• Federal PSDP reduced to Rs1tr, provincial ADPs to Rs2.218tr
• No new projects except for interior, defence ministries
• PM says strengthening defence is country’s biggest challenge
• Ahsan says Pakistan lagged behind region due to weak investment in education, skills
ISLAMABAD: Freezing provincial development plans at their actual utilisation this year, the National Economic Council (NEC) on Wednesday cut the federal and provincial development budget by one-fourth to Rs3.218 trillion for the next fiscal year from Rs4.264tr cleared by the Annual Plan Coordination Committee (APCC) last week.
Of the Rs1.046tr total cut, the combined annual development plans (ADPs) of the four provinces were slashed by almost one-third (29.3pc) to Rs2.218tr — roughly their actual utilisation so far in the current fiscal year — compared to the Rs3.138tr provincial portfolio finalised by the APCC on June 1.
Punjab’s development plan was chopped by almost half, or 49pc, the biggest cut among all stakeholders, while Balochistan remained unaffected and actually secured more.
The development freeze was agreed upon by the major coalition partners — the PPP and PML-N — before the NEC and budget dates were finalised.
To provide political face-saving to provincial governments, the federal government also agreed to bring down its Public Sector Development Programme (PSDP) by Rs126bn, or 11pc, to Rs1tr from Rs1.126tr recommended by the APCC, Planning Minister Ahsan Iqbal told reporters after the NEC meeting.
The meeting was presided over by Prime Minister Shehbaz Sharif and attended by three provincial chief ministers. Punjab Chief Minister Maryam Nawaz could not attend because of her recent surgery.
The minister said provincial governments had argued that it would be difficult for them to defend ADP cuts if the Centre’s PSDP remained intact.
Mr Iqbal said the Punjab chief minister had authorised the downward revision that restricted Punjab’s ADP for next year to Rs749bn from Rs1.455tr cleared by the APCC only a week ago.
Coalition partner PPP was able to minimise the dent to Sindh’s ADP, which was contained at Rs706bn for next year — down 13.5pc, or Rs110bn — from last week’s Rs816bn, which was already lower than the current year’s revised ADP of Rs845bn.
Khyber Pakhtunkhwa Chief Minister Sohail Afridi agreed to a revised ADP of Rs455bn — exactly the same as budgeted this year — instead of Rs564bn cleared by the APCC.
Balochistan was the only province to retain its Rs308bn development programme for next year, almost Rs29bn higher than the amount budgeted for the current fiscal year.
The separate development plans of federal state-owned entities remained unchanged at Rs451bn, putting the consolidated national development outlay at Rs3.669tr, down 22.2pc, or Rs1.046tr, from Rs4.715tr announced after the APCC meeting last week.
The APCC is a forum of federal and provincial planning ministers that finalises development recommendations for the NEC’s approval.
Informed sources said that with reappropriation of the development portfolio, around Rs800bn to Rs900bn could be repurposed for strategic needs such as water resources and national security.
Responding to a question, the planning minister said the development programme would contain “no new project except for the ministries of interior and defence” and noted that the actual size of savings would depend on many variables, including actual tax collections and how these savings became available.
For example, he said, the Diamer-Bhasha dam alone required Rs170bn but had been allocated Rs20bn. Total allocations for the water sector amounted to Rs103bn, he said.
