Latest news with #Sindh-specific
Express Tribune
11-06-2025
- Business
- Express Tribune
Rs1tr PSDP marked by political priorities
The computers along with latest printers and scanners to be provided to public sector girls schools working under FDE. PHOTO: FILE Marred by political considerations and fiscal constraints, the coalition government has proposed a Rs1 trillion Public Sector Development Programme (PSDP) for FY2025-26 – a significant cut from last year's original Rs1.4 trillion allocation. The reduced PSDP reflects the government's prioritization of infrastructure projects, particularly roads, often aligned with coalition allies' interests. In contrast, funding for education, health, space, and atomic energy programmes has been scaled back. The previous year's PSDP was trimmed mid-year to accommodate power subsidies and meeting IMF programme targets. For 2025-26, allocations for Sindh-specific schemes and parliamentarians' discretionary projects have increased, indicating a tilt toward politically strategic spending. The PSDP 2025-26 book shows the government's political priorities to appease allies and spend more on roads. It approved reduced budgets for Pakistan's space and atomic energy programmes, health and education but increased allocations for Sindh-specific projects and the parliamentarians' schemes. Major allocations have been proposed for the discretionary spending on the schemes recommended by the parliamentarians, Sindh-specific infrastructure projects and an enhanced allocation for the National Highway Authority. The allocations for water, power and railways have been drastically reduced to create fiscal space for the politically oriented projects. As against this year's Rs25 billion budget for discretionary spending on the parliamentarians schemes, the allocation has been proposed at Rs70 billion in the new budget, showing an increase of 172% in the middle of the tight fiscal space. The defence ministry's development budget has also been increased by 114% to Rs11.6 billion for the new fiscal year. For the provinces, special areas allocations have been proposed to be increased from Rs227 billion to over Rs253 billion due to coalition party-related spending compulsions. Within this, the allocation for the provincial projects has been proposed to be increased from Rs83 billion to Rs106 billion. The 28% increase in the provincial projects' allocations has been mainly given to address the concerns of the Pakistan Peoples Party (PPP), said a cabinet minister on condition of anonymity. Pakistan had committed to the IMF that the federal government would not allocate funds for provincial nature schemes. However, such a huge allocation is in breach of that commitment and the National Fiscal Pact. The Higher Education Commission's budget is drastically reduced to Rs39.4 billion, a reduction of Rs21.5 billion or 35%. The cut has been made to create room for spending on infrastructure projects. The health ministry's budget is cut to Rs14.3 billion – a reduction of Rs10 billion. Suparco's budget has been reduced from Rs24.2 billion to just Rs5.4 billon — a cut of 77% compared to the last year. The Pakistan Atomic Energy Commission's budget is reduced from Rs25 billion to Rs781 million, a reduction of 96%. A Finance Ministry official said that these entities had self-generated resources and did not need major allocations from the budget. Currently, 1,071 development projects with a total cost of Rs13.4 trillion are under implementation. These projects require an additional Rs10.2 trillion for their completion, and the planning ministry estimates it would take more than a decade to finish them all. The government has also proposed Rs16.2 billion for the information technology ministry, which is lowered by 32% over this year's allocation. The planning ministry stated that the PSDP 2025-26 has been formulated under a resource-constrained environment, marked by fiscal discipline, yet guided by an unwavering focus on development priorities. It added that drawing from the lessons of the ongoing PSDP 2024-25 and recommendations from various institutional reviews, including those under the IMF's Public Investment Management Assessment (PIMA) framework, a thorough review has been undertaken to prune the sick and non-performing projects in order to focus on priority projects that contribute to national development, economic growth and Uraan Pakistan framework. In the new budget, the government has planned to complete or initiate work on some mega and core national projects. These projects include N25 Quetta-Karachi, which is being funded by increasing petroleum levy by Rs8 per litre. Other priority projects include Sukkur-Hyderabad Motorway M-6, Dasu Hydro Power Project, including evacuation, Diamer Basha Dam projects, Mohmand Dam, K-IV and Water Augmentation projects of Karachi, Supply of power to Allama Iqbal Industrial City, Karachi and Islamabad IT Parks. The government has also included the World Bank-funded Pakistan Raises Revenue project in its priority list, which is considered a failed project. The planning ministry stated that among other priority projects are reconstruction of houses and schools damaged in Sindh in floods, Post-flood 2022 Reconstruction Programme in Balochistan, Thar Coal Rail Connectivity, Cancer Hospital in Islamabad, Prime Minister's National Programme for Control of Hepatitis 'C' and Diabetes. The document showed that the government has reduced the allocation for the water projects from Rs185 billion to Rs133.5 billion — a cut of Rs52 billion compared to last year. It also slashed the railway ministry allocation from Rs35 billion to Rs22.5 billion — a reduction of 37%. The power sector development budget allocation is reduced from Rs105 billion to Rs90 billion — a reduction of 28%. However, the NHA's budget is increased from Rs161 billion to Rs227 billion — a jump of Rs66 billion or 41%. The NHA budget has been increased to fund major infrastructure projects. Among the priority road schemes are widening and improvement of N-5 (Phase-I), Mashkhel Panjgur Road and East Bay Expressway Phase-II in Gwadar. Strategic advancements in space science are also prioritised through the Pakistan Manned Space Mission and the Pakistan Lunar Exploration Rover, according to the Planning Ministry.
Express Tribune
05-06-2025
- Business
- Express Tribune
Provinces demand NFC, agri tax review
The National Economic Council on Wednesday approved an enlarged national development outlay of Rs3.9 trillion, as some of the provinces have demanded reviewing the National Finance Commission and reopening the agriculture income tax issue with the International Monetary Fund. The NEC-approved the federal Public Sector Development Programme 2025-26 shows the government's political priorities to appease allies and spend more on roads. It approved reduced budgets for Pakistan's space and atomic energy programmes, health and education but increased allocations for the Sindh-specific projects and the parliamentarians' schemes. Headed by Prime Minister Shehbaz Sharif, the NEC also set the economic growth target at 4.2% and inflation at 7.5% for the next fiscal year 2025-26. The NEC is the nation's constitutional body having mandate to approve the macroeconomic and development plans. The NEC also expressed concerns over growing population and showed resolve to find a solution, as the economic growth in this fiscal year was almost equal to the population growth rate. The NEC approved the Rs1 trillion for the federal Public Sector Development Programme and Rs2.9 trillion for the provincial annual development plans. The cumulative budgets of Rs3.9 trillion negate the harsh fiscal ground realities, as the federal government even went to the extent of further reducing some critical proposed allocations to make room for more politically oriented development spending. As against its earlier plan to allocate Rs50 billion for discretionary spending on the parliamentarians schemes, the allocation has been approved at Rs70 billion, showed the NEC document. Not only that, the federal government further increased the spending on provinces' development project from three-day old allocation of Rs93.4 billion to nearly Rs106 billion. The room has been created by further reducing the spending on health and education from the level approved by the Annual Plan Coordination Committee on Monday. The Higher Education Commission's allocation is drastically reduced to Rs39.4 billion whereas the Ministry of health's budget is cut to Rs14.3 billion. To make room for political projects, the allocation for power sector projects was reduced from the earlier proposed Rs104 billion to Rs90 billion. But the water sector allocation has been increased to Rs133 billion, from earlier proposed Rs119 billion. Compared to the budget approved by the APCC on Monday, the Space & Upper Atmosphere Research Commission's (SUPARCO) budget has been reduced from Rs24.2 billion to just Rs5.4 billon while the Pakistan Atomic Energy Commission's budget is reduced from Rs4.7 billion to Rs781 million. The budget has been finalised by a committee comprising Deputy Prime Minister Ishaq Dar and PM's political Advisor Rana Sannuallah Khan. Such large allocations for the provincial projects are in breach of commitments to the IMF for reducing federal expense on provincial projects. The sources said that some of the NEC members discussed the low agriculture sector growth of mere 0.6% in this fiscal year and urged to change the economic policies, including high cost of inputs. The participants of the meeting said that Sindh asked to review the agriculture income tax and take it up with the IMF. Finance Secretary Imdad Ullah Bosal did not comment on the question whether the Ministry of Finance will take up the matter with the IMF. The four provincial governments have passed the new agriculture income tax laws but these have not yet been enforced. There is high chance that the IMF would not entertain any such request. The Khyber Pakhtunkhwa government took up the issue of delay in reopening the NFC award, as the provincial government is demanding higher share in the light of merger of the tribal districts. The prime minister assured the K-P government to convene the NFC meeting in August. However, the government has further reduced the K-P merged districts allocation from Rs70 billion to Rs65.4 billion that had been approved by the APCC on Monday. The Punjab government raised the issue of higher taxes on agriculture machinery. The NEC approved Rs2.86 trillion for the four provincial governments, with the highest spending outlay of Punjab worth Rs1.2 trillion. Khyber-Pakhtunkhwa will spend Rs417 billion. Sindh government plans to spend Rs995 billion and the Balochistan government is proposing Rs280 billion for development. The proposed development allocations by the four provinces are roughly Rs860 billion more than what the IMF has included in its plan. It means either the provinces will not be able to spend the entire allocations or the IMF cash surplus target will not be met. The NEC also reviewed the implementation of the annual plan for this fiscal and approved the economic targets for the next fiscal. It also took a review of the implementation of the PSDP for the current fiscal year, taking note of low utilization of the funds. The NEC also discussed the progress report of the CDWP & schemes approved by CDWP and ECNEC in the past one year. The NEC authorized the publication of 13th Five Year Plan 2024-29 and approved the URAAN Pakistan Implementation Framework. Exports are projected at $35.3 billion, while foreign remittances are expected to exceed $39.4 billion in the next fiscal year. Imports are projected at $65.2 billion with the current account deficit estimated at $2.1 billion for the next fiscal year. Currently, 1,071 development projects with a total cost of Rs13.4 trillion are under implementation. These projects require an additional Rs10.2 trillion to be completed, and the planning ministry estimates it would take more than a decade to finish them all. The NEC also approved to publish the Five-year economic plan 2024-29. The NEC was told that 13th Five-Year Plan has been updated as a result of stakeholders' consultations and is ready for publication the five year's plan is aimed at a balanced regional and equitable development, enhance export orientation of the economy - vibrant SMEs sector - social protection and poverty alleviation - improve the quality of human resources - moving into the knowledge economy - adaptation and mitigation strategy to combat climate change. The Prime Minister had launched 'URAAN Pakistan' on 31st December, 2024 and the NEC on Wednesday approved its implementation framework.
