By Sajid Chaudhry
ISLAMABAD: Development budget for Public Sector Development Programme for 2011-12 might cross the initial proposed allocation of Rs 280 billion, Sohail Ahmed, Federal Secretary Planning Commission (PC) told on Tuesday.
“PSDP for 2011-12 could be fixed between Rs 280-365 billion subject to the availability of financial resources,” Sohail said.
Secretary Planning Commission was talking to a selected group of journalists at the ministry of finance after attending Priorities Committee. The Priorities Committee is not only finalising development budget but also non-development ceilings of the federal government for the upcoming fiscal year 2011-12.
Medium Term Budgetary Framework (MTBF) makes it mandatory for the government to at least allocate Rs 365 billion for the development purpose in the next fiscal year—however due to financial constraints, the ministry of finance had proposed Rs 280 billion as an initial ceiling for next fiscal year’s development budget.
During the Priorities Committee meeting—concluded on Tuesday—several ministries and divisions demanded more funds against the initial development ceilings, which were conveyed to them for the next fiscal year 2011-12.
“We have scarified and placed a cut of Rs 100 billion in development budget in the ongoing fiscal year 2010-11 for meeting flood affected areas needs. In case the resource availability allowed us to increase the development budget that there would be higher allocation against initial ceiling of Rs 280 billion and in case the finance ministry asked us to keep the development outlay within available resources there would be no choice with us to maintain it at Rs 280 billion for the upcoming fiscal year 2011-12,” he maintained.
Secretary Planning Commission informed that Annual Plan Coordination Committee is expected to meet early May—and Planning Commission and Ministry of Finance would table the recommendations of the Priorities Committee in the APCC meeting for initial approval.
Once the recommendations of the Priorities Committee and Annual Plan Coordination Committee are firmed up, these would be placed before the National Economic Council headed by the Prime Minister Syed Yousaf Raza Gilani for final approval.
Official sources informed that under the 18th constitutional amendment, 18 federal ministries will be devolved to the provinces and development or non-development budget allocation would be made for such ministries, however, small allocations would be made for their remaining departments in the federal government.
According to the official sources, ministries and divisions have strongly resisted a 5%-7% increase in non-development budget and asked the Priorities Committee to at least allow them an “increase” according to the rate of inflation.
According to the official sources, it has been decided that the Council of Common Interests (CCI), headed by Prime Minister Yousaf Raza Gilani, would meet on April 28 to decide on the transfer of 230 projects worth Rs 252 billion to the provinces. The federal government has plans to transfer such projects to the provinces under the 18th constitutional amendment as well as the 7th National Finance Commission Award.
In case the CCI decides the transfer of 230 projects worth Rs 252 billion to the provinces, the federal government would stop their financing from July 1, 2011—and provinces would be required to arrange financing for these projects from federal transfers—which would be made to them from the 7th NFC Award.
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