ISLAMABAD: The national development outlay for the fiscal year 2014-15 has been set at Rs1,175 billion, including a foreign aid component of Rs192bn.

According to the budget documents released here on Tuesday, the federal PSDP has been set at Rs525bn with a foreign assistance of Rs102bn. The annual provincial development plans amount to Rs650bn and include a foreign aid component of Rs90bn. This PSDP is 13 per cent larger than the one initiated in 2013-14.

In the PSDP for 2014-15, major investment is envisaged in the energy sector, followed by transport and communications. The China-Pakistan Economic Corridor is one of the new major infrastructure development projects under the new PSDP.

Critical development projects consistent with the government’s ‘Vision 2025’, expected to have a high impact, are being given priority in fund allocation.

The plan is being executed through policies, programmes and projects that fall under seven heads: social and human capital; sustained indigenous and inclusive growth; democratic governance; institutional reform and public sector modernisation; energy, water and food security; private sector and entrepreneur-led growth; the development of a competitive knowledge economy through value addition; and modernising infrastructure and strengthening regional connectivity.

In the water resource development sector, a budgetary allocation of Rs57.8bn in 2013-14 has been reduced to Rs42.7bn for 2014-15. Out of this, resources has been allocated to ongoing development programmes to ensure their timely completion, including the construction of small and medium-sized dams, drainage projects, new canals and the improvement of the existing irrigation network.

An allocation of Rs240bn has been made for energy projects and 575MW are expected to be added to the system during the next year. The government allocated Rs12.5bn for the achievement of the Millennium Development Goals, mainly in the education and health sectors, by involving local communities. This will be a demand-driven programme where the government would intervene to address unmet needs.

An amount of Rs20.8bn has been proposed for different preventive and curative health programmes. All the vertical programmes in health sector would continue to be funded by the federal government during next PSDP period.

An amount of Rs5.7bn was allocated in PSDP 2013-14 for the capacity-building of teachers and the establishment, strengthening and expansion of schools and colleges. But this amount has been reduced to Rs4.2bn under the next PSDP, mainly due to the 18th Amendment.

While better governance being a key factor in ensuring effective service delivery, the government has reduced allocation in this segment to around Rs4.8bn (including a foreign aid component of Rs1.4bn) by 14 per cent from last year’s allocation.

Published in Dawn, June 4th, 2014