UNDETERRED by the growing financial crunch that keeps development spending starved of funds, policymakers have set the Public Sector Development Programme 2012-13 at Rs873 billion, including a federal share of Rs360 billion.

Similarly, the draft PSDP strategy is stated to have been evolved in line with the oft-repeated government’s nine-point agenda to ‘ensure’ inclusive growth —, reduce poverty, minimise wastages, create employment, increase food, water and energy security. — and move towards balanced development. So far, for all practical purposes, ‘inclusive growth’ has largely remained a rhetoric.

The draft PSDP document has allocated funds for various ministries and departments in a fashion that does not seem to support the government’s nine-point economic agenda.

Over 70 per cent of the development budget has been earmarked for projects of the ministry of water and power, Atomic Energy Commission, Pakistan Railways and the planning and development divisions. The remaining 36 ministries and divisions would have to rely only on 30 per cent of the budgeted funds. It is not clear whether the development strategy would lead to harmonious development of various sectors or it would continue to create drags in the overall economic growth by focusing on a few areas.

As expected in an election year, the PSDP document reveals that a significant allocation, perhaps more than government resources permit, has been earmarked for projects proposed by legislators for their constituencies. While the legislators are responsible to their electoral constituency’s socio-economic uplift, how prudent would the stepped up development spending would be in an election year is questionable.

Over the past few decades, development expenditure has been restrained by enormous rise in debt servicing and defence spending following the ‘war on terror’. Pakistan’s economy has been badly hurt by the fallout of the Afghan war.

The development budget over the past one decade has led to an increase in poverty, unemployment and slowing down of economic growth.

There is no let up in joblessness. In 2010-11, unemployment was reported at six per cent. However, the rising trend shows that unemployment rate has increased to 8.8 per cent from seven per cent in urban areas, while in rural areas it has decreased marginally. The accuracy of these figures is also questionable because the methodology for unemployment also takes into accounts self- employed and unpaid family workers while determining the national unemployment figure.

Over the past few decades, the country has witnessed de-industrialisation and much of the investment has gone into consolidation rather than in industrial expansion.

The ministry of production has been allocated Rs937.9 million for ongoing projects mostly for completion of SMEs projects. Similarly, for the ongoing projects of the ministry of industries an amount of Rs805.859 million has been proposed for next year, mainly for the SME sector.

The ministry of production, industries and textiles have not been able to do much to encourage industrialization. For the textile industry, which contributes to over 50 per cent exports, an amount of Rs145 million has been earmarked in the PSDP. And the commerce ministry, which facilitates exports, has been allocated a nominal amount of Rs343.766 million.

In the past three years, the economic growth has averaged over three per cent per annum, contributed mainly by the resilience in the economy with a drag created by low government development spending and critical energy shortage.

In short, there is a need for the Planning Commission to revisit its development policy and approach for better allocation and utilisation of national resources. The finances should go only to those projects which could generate employment and promote a balanced and inclusive economic growth. It should not be forgotten that when development takes place, the issue of equity does not lag behind.