PSDP suffers massive cuts

ZAHEER ABBASI

ISLAMABAD: The government massively slashed development expenditures to reduce its rising unplanned budget deficits, however, each year the gap between the budgeted deficit and the actual has widened.

As a consequence, Public Sector Development Programme (PSDP) utilization declined considerably from 14.8 per cent of the total budget in 2008-09 to 7.6 percent in FY11.

The above table shows the slash in budgeted PSDP allocations each year, the largest decline in last fiscal year, however the gap between the budgeted deficits and actual have widened over the past three years.

In 2008-09, total federal PSDP and development expenditure outside PSDP (inclusive of BISP), stood at Rs308 billion - 14.75 per cent of the total outlay of Rs2087.027; in 2009-10 it declined to Rs294 billion or 11.37 per cent of total outlay of Rs 2586 billion. In 2010-11 it stood at Rs 196 billion - 7.6% of the total expenditure of Rs2559.367 billion.

Analysts attributed the steady decline of development expenditure from 2008-09 onward to the government’s failure to control current expenditure. Current expenditure for fiscal year 2008-09 was revised upward from Rs1493 billion to Rs1649 billion.

The government also made an upward revision in current expenditure for 2009-10 - from Rs1699 billion to Rs2017 billion and for 2010-11 from Rs1997 billion to Rs2295 billion.