KARACHI, Jan 21: The next Annual Development Programme (ADP) of the Sindh government is likely to be slashed by over 50 per cent due to constraints of the federal government.

These constraints were communicated to the Sindh government by caretaker federal Finance Minister Dr Salman Shah during his most recent visit to the provincial capital last week, it has reliably been learnt.

During the meeting, the Sindh government was advised that their next ADP outlay should not cross the Rs26 billion mark, which, according to the sources, would be in line with the requirement of the macroeconomic policy being pursued by the government.

The current ADP for fiscal 2007-08 is Rs50 billion, which is 53 per cent higher than the Rs32 ADP billion budget of the previous year.

In the light of the constraints imposed by the federal government, the planners in the Sindh government were at their wits’ end and all planning for fiscal 2008-09 had reportedly come to a standstill, informed sources said, adding that as the caretaker Sindh government was an interim set-up, it found itself unable to raise the issue with the federal government.

The planners were of the view that the cut may likely impact the overall social sector development programme. They pointed out that in the current ADP the major thrust was on the communications sector in the urban as well as the rural areas of the province because communications is a major vehicle for development.

In the ADP the allocation for communications is Rs7.6 billion, which comes to about 19 per cent of the programme.

Under the special package for Karachi, Hyderabad and the rural areas, a sum of Rs5.14 billion was earmarked in the programme.

The provincial ADP was totally funded by the Sindh government and did not include any federal grant, the sources pointed out.

It is learnt that the federal government -- whose Public Sector Development Programme is of Rs520 billion for fiscal 2007-08 -- was also asked to slash the PSDP allocation by Rs60 billion to keep the budget indicators in line with the IMF target of restricting the fiscal deficit to 4 per cent of the GDP.