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Rs 300 billion development spending unlikely this year

The Planning Commission is unlikely to ensure Rs 300 billion development spending, allocated in the budget for the current fiscal year, due to severe challenges on the fiscal side. A Finance Ministry official said that the government would disburse Rs 100 billion in the first six months of current fiscal year for PSDP.

However, other sources told this correspondent that this was unlikely as up to December 16, 2011 only Rs 78 billion had been disbursed. They said that given the pace of releases, PSDP allocations would be unable to reach 40 percent of the budgetary target in the first six months of the current fiscal year.

However, Deputy Chairman of Planning Commission, Dr Nadeem ul Haq, was optimistic and his immediate response to this correspondent's query was: "There will be no cut in PSDP this year." He expressed surprise to learn that only Rs 78 billion had been released to-date in the current fiscal year and the possibility of the release of another Rs 22 billion, considered unlikely given the federal government's financial constraints, would be required in the next ten days to achieve 40 percent of the budgetary target.

Materialisation of estimated Rs 36.5 billion foreign exchange component in the development program also seems unlikely during the current fiscal year and Rs 78 billion consists of the domestic component of federal development program of Rs 220.5 billion. The government has so far been unable to release any funds for the Rs 33 billion earmarked for special program in the budget primarily due to financial constraints.

The government released Rs 40.9 billion for infrastructure projects against allocated Rs 157 billion in the current year's budget which included Rs 126 billion local and Rs 31.2 billion external funding assistance components.

According to Planning Division, multilaterals and bilaterals have not disbursed any amount during the first six months against the infrastructure development projects or for other sectors. The PSDP releases for the social sector during the first six months was only Rs 36.8 billion compared to the Rs 129.3 billion allocated in the budget for the current fiscal year.

Copyright Business Recorder, 2011