Expectedly, the axe seems to have fallen on the country’s development budget as, according to media reports, development spending has been cut by a whopping 25 percent to Rs 717 billion. In other words, the size of Public Sector Development Plan (PSDP) has declined from 1.7 percent of the GDP in 2013 to less than 1 percent of GDP—0.9 percent—in 2023-24.
How unfortunate it is that budgetary resources are being diverted to ‘constituency politics’ and deficit financing. Not only is this approach a clear violation of the decisions taken by National Economic Council (NEC), it is a sure recipe for massive increase in joblessness in the country.
Little do our policymakers realize that higher PSDP spending puts the country on a high-growth trajectory. Instead of slashing the current expenditure, the successive governments have been reducing PSDP allocations mercilessly.
Our policymakers must not lose sight of the fact that the BJP government in India ramped up capital spending enormously last year in order to brighten its electoral prospects, although these were not dim at all. Our government needs to work harder to bring country’s public finances from a ‘sorry state’ to a ‘solid state’ by initiating certain steps. One of the steps must be higher PSDP allocations.
Zaheer Alam Aarain
Lahore
Copyright Business Recorder, 2024
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