Rs319.4bn likely for development: PSDP budget may go up by 34pc
By Khaleeq Kiani
ISLAMABAD, May 24: The federal government has decided to allocate Rs319.4 billion for next year’s development programme and to set up two funds of Rs6 billion — road development fund and infrastructure fund. It would be formally approved by the National Economic Council (NEC) which will meet here on May 27 with Prime Minister Shaukat Aziz in the chair. A copy of the summary for the NEC made available to Dawn suggests that the Rs319.4 billion development budget would include a Public Sector Development Programme (PSDP) of Rs272 billion. The PSDP will include federal projects of Rs204 billion, provincial projects of Rs68 billion and a foreign exchange component of Rs52 billion.
The PSDP 2005-06, recommended by the Annual Plan Coordination Committee at Rs272 billion, will be 34.6 per cent higher than the current year’s PSDP of Rs202 billion. Outside the PSDP, the Water and Power Development Authority is expected to spend Rs34.9 billion, including foreign loans of Rs13.3 billion, on its own. Wapda has been asked to raise Rs8 billion through bonds against federal sovereign guarantees.
The National Highway Authority (NHA) will also raise at least Rs5 billion from commercial banks through securitization of its toll revenue and federal receipts. “This will lead to a total development outlay of Rs319 billion during the next year,” says the summary
Of the Rs272 billion PSDP, projects under federal ministries would cost Rs130.874 billion. The centre would provide Rs37.18 billion for development programmes of various corporations, besides Rs22.27 billion for special programme and Rs13.676 billion for special areas like AJK, Northern Areas and Federally Administered Tribal Areas.
Infrastructure would get Rs99.3 billion, social sectors Rs78.9 billion and other sectors will be given Rs25.8 billion. The NHA has been asked to establish a roads development fund. The annual budgeted amounts for the NHA and the toll collected by it would form part of this fund.
Another fund to develop basic infrastructure would be set up in cooperation with multilateral lenders like the World Bank and the Asian Development Bank. Under this initiative, Rs1 billion has been allocated for 2005-06 to promote the public-private partnership. The infrastructure fund would be managed by professional managers under the finance ministry.
To complete major water projects, allocation for the water sector has been increased by 64 per cent to Rs35.6 billion which will be 20 per cent of the total PSDP compared to 17 per cent or Rs21 billion in 2004-05. It is expected to accelerate agriculture growth in the medium term and promote construction-related jobs in the implementation stage. An amount of Rs10 billion has been allocated for the Mangla dam raising project for next year against a Wapda demand of Rs18 billion. Wapda has been asked to raise Rs8 billion through bonds to bridge the gap. However, the water and power ministry has expressed inability in this regard, says the summary.
Special programmes have been given an allocation of Rs17.9 billion, including Rs12 billion for two phases of the Khushal Pakistan Programme, Rs5.5 billion for new projects, Rs1 billion each for village electrification, ongoing projects and development of less developed areas. Another Rs5 billion have been allocated for the Khushal Pakistan Fund.
These programmes are in addition to Rs1 billion for Drought Emergency Relief Assistance for Balochistan.
SOCIAL SECTORS: The allocation for education and vocational training has been increased by 50 per cent to Rs4.5 billion with higher education getting an increase of 28 per cent. An amount of Rs6 billion has been allocated for watercourse improvement.
The allocation for the health sector has been increased by 72 per cent to Rs9.4 billion. Information technology and science and technology sectors have been given an increase of 57 per cent and 52 per cent to Rs3.3 billion and Rs3 billion, respectively. The allocations for special areas (AJK, NA and FATA) have been increased by 21 per cent.
Chief Ministers, the prime minister of Azad Kashmir and the NWFP governor besides all federal ministers and provincial ministers for finance and planning are expected to attend the NEC meeting.
