Budget 2023-24: Finance ministry proposes Rs700bn PSDP

• Budget Strategy Paper yet to be tabled before federal cabinet.
• Ministry of Planning proposes allocation of Rs200bn through P3.
• Annual Plan Coordination Committee will meet on May 23.

ISLAMABAD: Ahead of the upcoming budget for the fiscal year 2023-24, the Ministry of Finance has proposed an indicative budget ceiling worth Rs700 billion for the Public Sector Development Programme (PSDP), The News reported Wednesday.

For the development programme, the ministry has also decided to slap a ban on incorporating unapproved new and provincial projects. 

Meanwhile, the Ministry of Planning has also proposed an allocation of Rs200 billion through public-private partnership (P3). Despite this, the government continues to dole out funds for the achievement of Sustainable Development Goals (SDGs) for parliamentarians for the current financial year. 

The Cabinet Division has so far utilised Rs93 billion for all schemes related to the parliamentarians for the SDGs programme. 

Yet another summary has been moved for the allocation of an additional Rs20 billion for the SDGs Achievement Programme (SAP) for the current fiscal year, making the total allocation up to Rs113 billion till the end of June 2023.

Budget 2023-24

Meanwhile, the government has started preparation for the next budget but so far, the Budget Strategy Paper (BSP) could not be tabled before the federal cabinet. 

“Ministry of Finance has hinted towards an indicative budget ceiling to the tune of Rs700 billion for the PSDP in the next budget whereby no new unapproved development schemes will be inserted into PSDP for the upcoming budget," sources told The News. 

It should be noted that the Annual Plan Coordination Committee (APCC) is scheduled to meet on May 23 for recommending macroeconomic and development plans for the budget 2023-24. 

Then the National Economic Council (NEC) is expected to meet under the chair of Prime Minister Shehbaz Sharif in the first week of June 2023.

Ministry of Planning Federal Secretary Syed Zafar Ali Shah, who had returned from abroad recently, chaired a maiden meeting on the preparation of the development budget for the next financial year in which the finance ministry indicated a budget ceiling worth Rs700 billion. 

“However, secretary planning has directed the authorities to devise a mechanism to utilise PSDP funding up to Rs800 to Rs900 billion for the next budget,” the sources said.

The federal government has so far utilised Rs 380 billion on different schemes of the PSDP out of the total released funding of Rs 673 billion.

The Ministry of Planning has asked the Finance Division to sanction the released amount of funding as early as possible. During the meeting, it was also pointed out that the government allocated more funds for National Highway Authority (NHA) for the outgoing financial year which remained unutilised up to the desired mark. 

Now the government would allocate more funds for other sectors in the upcoming budget.

To secure political support from alliance parties, the government increased the funding for the controversial SDG Programme for parliamentarians from Rs70 billion to Rs90 billion during the current fiscal year 2022-23. 

The sanction for SAP funding stood at Rs87.198 billion until April 14 with Rs49.856 billion already spent on different schemes. 

This indicates that almost 55% of expenditures were already incurred against the total allocated amount for the current fiscal year. 

During a recent steering committee meeting, it was proposed that electricity transformers should be installed by respective power distribution companies in their areas after the federal power secretary refused to take responsibility. 

This proposal was deferred for the time being. These programmes are coming under increasing criticism for lack of proper evaluation mechanisms and effective monitoring to ensure transparent utilisation of funds.