Federal Government wants to free provisional development projects’ funds

The federal government has agreed to consult with chief ministers before limiting or reordering more than 335 federally sponsored provincial projects to free up over Rs150 billion during the current fiscal year.

The move is intended to reduce federal spending to effectively complete the final evaluation of the ongoing $3 billion IMF program, scheduled for February, with minimal further taxing measures.

According to a news source, the federal government had scheduled a meeting of chief ministers, provincial finance ministers, and chief secretaries with federal finance and planning ministers on Thursday. Still, the meeting had to be postponed due to the absence of two province chief ministers.

According to official documents, provincial projects would get around Rs315 billion, accounting for nearly one-third of the Rs950 billion federal Public Sector Development Program (PSDP).

As a result, the center is unwilling to support more than 135 PSDP initiatives in the current fiscal year that have made no progress. According to the Ministry of Finance, this alone will provide Rs115 billion.

According to the federal government, this strategic change was necessary to make sure that limited federal funds were used with the best economic results from a national perspective and to avoid an ongoing loss of funds without intended returns due to project interruptions and price hikes due to insufficient financing among large holdings.

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