What You Need to Know About PSDP Funds?

This year, the Ministry of Finance the Planning, Development and Special Initiatives (PD&SI) Division notified about releasing funds for the development budget out of the Public Sector Development Programme (PSDP) allocation for the current fiscal year 2023-24 for approved projects.

Let’s look at PDSP and its link to the Ministry of Planning, Development, and Special Initiative report.

What is PSDP?

The Ministry tackles research studies and state policy development initiatives for national growth and expansion of the public infrastructure of Pakistan.

It works closely with PSDP. The PDSP provides a framework for the government development plan and sets regional and sectorial priorities under the national action plan. The ministry has allocated Rs2709 billion for the development program.

Out of this, a significant sum of PKR 950 billion has been designated for federal public sector development (PSDP) for the fiscal year 2023-24.

According to the report, the 15 percent PSDP funds to be released for Q1, fiscal year 2023-24 (domestic) is Rs131 billion. Funds released for approved SDGs schemes for 2023-24 is Rs41 billion.

The notification further states, that Rs11.5 billion are released with respect to foreign exchange components during Q1, fiscal year 2023-24. The available remaining funds for PDSP schemes during Q1, the fiscal year 2023-24 is Rs69.74 billion.

During the execution, the PD&SI division and the PAOs concerned shall ensure the implementation of the provisions contained under Chapter-III of the Public Finance Management Act, 2019.

For the release of the funds for PDSP, the PD&SI division shall devise quarterly sector-wise/project-wise/division-wise strategies according to the appropriations approved by the national assembly and those included in the Schedule of Authorized Expenditure in terms of Article 83 of the constitution of Pakistan.

On the other side of the report, we see that Rs1559 billion has been allocated for the provincial annual development programs and Rs200 billion is reserved for public-private partnerships.

The report suggests that the government is committed to growth but upon looking closely, it also suggests that all is not merry.

Are PSDP funds a political tool?

There is slight evidence of the funds being used for political interests rather than national interests.  While looking at the division of the funds, for the ministries a sum of Rs480 billion is allocated. Considering their roles one asks the question whether it is justified.

In a country that is clearly facing a huge crisis, the allocation of funds seems to suggest that the priorities are not straight here.

Would the government focus on building picturesque infrastructure or navigate the food insecurity threats and other possible threats that can harm a large portion of the population?

Will these funds genuinely translate into improved governance or are they merely going to work wonders for the political interests?

Per Minister Shamsad Akhtar, the politically motivated SAP schemes and the rest of the federal and provincial development projects are being financed through expensive debt which is “unsustainable”.

Considering the challenging times, the top priority of the government should be finding a balance between political interests and national interests.

If no further projects are added to the scheme, then only the current approved ones will take approximately 14 years to complete. The country needs to depoliticize PDSP for a better and flourishing Pakistan.

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