The International Monetary Fund (IMF) has urged the Pakistani government to fully utilize its development budget at both provincial and federal levels to support economic growth.
According to IMF officials, the government has utilized just 27% of the total amount allocated to the Public Sector Development Programme (PSDP).
After a meeting with the IMF team in Pakistan to evaluate government's compliance with the conditions of $6 billion bailout package, Minister for Planning, Development and Special Initiatives, Asad Umar, said:
IMF has asked the Pakistani government to completely utilize the funds earmarked for PSDP.
The Planning Minister said that actual PSDP expenditure in the first seven months has always remained between 21-28% of the budget allocation since FY 2014-15. Except for FY 2017-18, the full-year utilization has always remained between 83-96%.
Based on this projection, the minister expects to utilize 100% of the Rs. 701 billion of the PSDP as the 7-month expenditure stands at Rs. 188 Billion or 27%.
According to Secretary Planning Zafar Hassan, there are 1,034 projects under the current PSDP. Out of these, 171 will be concluded before June this year.
A recent report by the Prime Minister's inspection commission revealed 191% cost overruns of all projects. This implies that a project of Rs. 100 million is being completed at a cost of Rs. 291 million due to 6-8 years of delays.
Priority Initiatives in The Next 6 Months
Asad Umar said that the Planning Commission has become worthless and lost its relevance. IMF programs remain the primary reason for this as IMF deals mainly with the Finance Ministry.
However, the Prime Minister has directed the Planning Ministry to find its lost glory by introducing priority initiatives in the next 6 months. In this regard, the Planning Commission's revitalization strategy will be devised before June.
The Planning Ministry is set to launch a three year Economic Growth Strategy 2021-23 before June this year as the country looks to gain growth momentum before the next fiscal year.
Furthermore, the project development, monitoring, and evaluation systems of the Planning Ministry will also be revamped before June. The revamp process will be followed by the implementation of SDGs aimed at improving the living standards of commoners. The Planning Ministry has sent a summary to the Prime Minister Office for constituting a unified committee of both provincial and federal governments to effectively monitor the implementation of SDGs.
The Planning Commission will establish a Construction Industry Development Board (CIDB) with the purpose of incentivizing different services in the construction sector. Later on, the Ministry of Housing will take control of the CIDB.
Initiatives Under CPEC
Under the China-Pakistan Economic Corridor (CPEC), the Planning Ministry will set up a new joint working group on science and technology under the CPEC that would further consolidate bilateral ties.
Other initiatives under CPEC include Gwadar Expo 2020, the groundbreaking of the Rashakai zone, and the introduction of a special incentives package for industrial zones. The ministry will also create a business forum that would offer businessmen a unified platform to interact under CPEC.
Both China and Pakistan had agreed to allow third-party participation in CPEC last year. Work on the formulation of a proper framework is near completion that would allow third-party investments in CPEC.
Source: Pro Pakistani