ISLAMABAD: The government finalised on Wednesday a Rs450 billion public sector development programme (PSDP) for federal projects and Rs627bn defence budget for next financial year, showing an increase of 25 per cent and 15 per cent respectively over the current year.

The budget allocations for the next year were firmed up by the priorities committee of the Ministry of Finance and Planning Commission in their meetings over the past 10 days with relevant ministries, divisions and autonomous public sector organisations. It also set the size of the next year’s budget for service delivery by various ministries and divisions at Rs278bn.

The allocations finalised by the priorities committee would be presented to the Annual Plan Coordination Committee (APCC) later this month and then to the National Economic Council (NEC) for approval and inclusion in the federal budget. Some minor adjustments could be made in the development programme by the NEC on recommendations of the president and the prime minister.

With sector-wise allocations, the total size of the budget is estimated at about Rs3.515 trillion against the revised expenditure of the federal government at Rs3.195 trillion for the current year, showing an increase of about 10 per cent or Rs320bn.

Officials said the size of federal development programme for federal ministries for next year had been put at Rs259bn compared with Rs206.5bn of the current year, up by about 25 per cent. The highest share of Rs64bn has been allocated for water sector projects, up from Rs47bn of this year.

The power sector (Wapda) will spend another Rs39bn next year on development schemes, up from Rs29bn this year. As such, the water and power sector would get a total of Rs103bn, accounting for almost 23 per cent of the Rs450bn PSDP. The PSDP allocation for the current year was Rs360bn.

The Pakistan Atomic Energy Commission (PAEC) will get Rs54bn during the next fiscal year, mostly for nuclear power projects, up 38.5 per cent over current year’s allocation of Rs39bn. Energy and water projects will get Rs157bn next year, compared with this year’s Rs115bn.

Speical areas, including Azad Kashmir, Gilgit-Baltistan and States and Frontier Regions, will get Rs46.6bn in next year’s development programme compared with Rs36bn of the current year.

Another Rs13.5bn will be provided to Earthquake Reconstruction and Rehabilitation Authority (Erra) for completion of projects to rehabilitate the Kashmir region devastated by the Oct 2008 earthquake and affected by diversion of funds to the Benazir Income Support Programme and resettlement of internally displaced persons in Malakand division. This year, Erra was given Rs10bn.

Allocations for special programmes – two segments of people’s works programme – have been frozen at the current year’s level of Rs27bn. The planning and development division will get Rs39bn for its development projects and the Railways division will get Rs30bn.

The Ministry of Finance has been allocated Rs19bn next year against Rs13.6bn this year, an increase of almost 40 per cent. Likewise, the Higher Education Commission (HEC) will be given Rs17.8bn for its next year’s development programme compared with Rs15.8bn this year.

Sources said that besides normal defence allocations at Rs627bn, the defence division will get another Rs8.8bn for service delivery, Rs4bn for development programme and unspecified grants as share of disbursements under the coalition support fund and the Pak-US strategic cooperation.

The defence production division will be given Rs2.3bn for development and Rs587m for service delivery.

Officials said the meeting of the APCC to be presided over by prime minister’s adviser on finance and attended by provincial finance ministers will be held in the last week of April to recommend the PSDP and macroeconomic framework to the NEC for approval at its annual meeting which is expected to be held in the first week of May. The finance ministry wants to complete all formalities relating to the budget and plans to announce federal budget on or around May 31, depending on the completion of political transition.