On Tuesday, the National Economic Council (NEC) approved a “fiscally irresponsible” federal development budget of Rs950 billion, of which 46% allocations have been given to the newly-included 311 schemes, indicating the government’s election priorities.
Headed by Prime Minister Shehbaz Sharif, the NEC — the constitutional body mandated to approve the development and national economic plans — approved a total of Rs2.509 trillion national outlay including allocations proposed by the provinces.
However, an in-depth review of the Rs950 billion worth Public Sector Development Programme (PSDP) disclosed that 46% of the proposed budget had been given to the new 311 schemes. This is one of the highest-ever ratios that will ultimately put the country’s development spending on the wrong track.
For the ongoing 871 schemes, only Rs516 billion have been allocated, which will severely impact the work and push their completion period far behind the schedules. This will also increase the completion cost due to uncontrolled inflation in the country.
An allocation of Rs80 billion has been made for the prime minister’s initiatives and another Rs90 billion for the parliamentarians’ schemes.
Compared to this, a meagre sum of Rs200 million has been proposed for the Rs2 trillion strategically important Main Line-1 (ML-I) project of the China-Pakistan Economic Corridor.
This indicates that the government needs a plan to start work on this $11 billion CPEC project in the next fiscal year too. The project is already five years behind schedule.
However, Planning Minister Ahsan Iqbal claimed adequate allocations were made for the CPEC projects.
In yet another move that shows how fiscally irresponsible the budget has been prepared, 135 projects are included in the proposed PSDP 2023-24, whose approval still needs to be secured.
Iqbal said the NEC decided all those projects will be dropped from the PSDP, whose administrative approvals will remain pending after June 29.
The International Monetary Fund will not endorse any budget that breaches its guidelines seeking a fiscally responsible and sustainable budget.
The NEC approved Rs2.509 trillion cumulative national development outlay for spending by the federal government and the four provinces. The Rs2.5 trillion allocation was Rs90 billion or 4% higher than this fiscal year.
