ISLAMABAD:The government is set to approve a record Rs4.1 trillion national development budget for the Centre and provinces amid scarcity of resources that has compelled it to ban small-scale projects and not to include federally-funded province-specific new schemes for next year.
Despite the threat of blocking water by India, the government has proposed to reduce the water sector allocation by 45% or Rs119 billion to just Rs140 billion for the fiscal year 2025-26 against the originally approved budget.
Yet, the proposed federal Public Sector Development Programme (PSDP) reflects the coalition government’s political priorities, with hefty allocations for road infrastructure, while funding for education, health, and water has been significantly slashed for the fiscal year 2025-26.
The Annual Plan Coordination Committee (APCC) will approve the national development budget outlays for the federal government, four provincial governments and the special areas of Pakistan.
Planning Minister Ahsan Iqbal will chair the meeting, which will also recommend 4.2% economic growth and 7.5% inflation targets for the next fiscal year.The federal PSDP has been finalised by a committee constituted by Prime Minister Shehbaz Sharif aimed at accommodating the needs of the coalition partners.
The APCC will approve a cumulative Rs4.1 trillion outlay for development, which will be Rs300 billion or 8% higher than this fiscal year’s original budgets approved by the National and four provincial assemblies.
There has been a reduction in the federal PSDP, but the four provincial governments will cumulatively spend 28% higher than this year’s budget from their own resources. Provinces are rich, thanks to the ill-planned National Finance Commission award of 2010.
The APCC will approve Rs1 trillion federal PSDP, down by Rs400 billion compared to this fiscal year’s original budget approved in June last year. The federal government will borrow Rs270 billion from abroad to fund this Rs1 trillion spending.
The four governments plan to spend Rs2.8 trillion, higher by Rs609 billion or 28% over this year’s original budgets. The provincial governments will also borrow Rs802 billion from abroad to fund their projects.
Another Rs288 billion will be spent by the government-owned companies outside the federal budget.
Punjab is on a spending spree, as it plans to spend Rs1.19 trillion, which is higher by Rs346 billion or 41% over this fiscal year’s budget.
