ISLAMABAD: Pakistan Association of Large Steel Producers (PALSP) on Tuesday urged the government to release maximum PSDP funds without any delay to revive industry as well as troubled economy, after massive destruction caused due to unprecedented floods.

According to a communication of the PALSP to the Ministry of Planning and Development on Tuesday, it will help to stimulate economic growth, create much needed job opportunities and provide a breather to the entire industry of the country.

For the fiscal year 2022-23, government has allocated the federal development budget of Rs 800 billion under the Public Sector Development Programme (PSDP). For the first quarter of the current fiscal year, the government drastically cut the development expenditure by amending the release strategy of funds of the PSDP 2022-23 vide Finance Division Notification No F. 3(I)FO/2022-23.

The percentage of development funds released for the first quarter has been slashed from 20 percent to 10 percent (that is Rs 80 billion of the total of Rs 800 billion of the PSDP, the documented steel sector said.

Moreover, in the last quarter of the fiscal year 2021-22 no releases in PSDP expenditure were made. This happened for the first time in the last 75 years due to the non-availability of funds in the national kitty and the government stopped disbursing funds to development projects to finance massive budget deficit.

As a result of the above situation, all the government projects are almost on standstill and slow down of economic activity is witnessed. Due to low PSDP spending, the steel sector remained under pressure for the past couple of years because the steel sector is highly correlated to PSDP expenditure. The worries of the sector further increased after further and drastic reduction in PSDP funds release.

The long steel industry has been facing serious troubles that have come about due to a bad economic situation and high cost of doing business. Now the situation worsened due to the devastating floods in Sindh, Punjab, Balochistan and KP that have hurt the supply chain affected sent demand hurtling down and roads & railway system badly damaged. Heavy rains usually wreak havoc on off take of steel units stopped their production and on halt.

Copyright Business Recorder, 2022