Planning Ministry Faces Funding Challenges for Development Projects

The Finance Division has yet to provide the Planning Ministry with the Indicative Budget Ceiling (IBC) for the Public Sector Development Programme 2024-25. The ministry has requested a Rs 200 billion increase in the federal developmental budget for the upcoming fiscal year. Demands exceeding Rs 2.9 trillion for development projects have been submitted to the planning ministry from various ministries and divisions.

Meetings of the priority committees, which usually precede the Annual Plan Coordination Committee (APCC), have been postponed for the next fiscal year. The APCC meeting is scheduled for next week, with a proposed date of 27th or 28th May. The Finance Division typically issues the IBC by mid-May, but it has not been released yet.

Without the IBC, creating a realistic Public Sector Development Programme becomes challenging. The initial allocation for the ongoing fiscal year 2023-24 was Rs 950 billion, with a rupee component of Rs 875 billion and a foreign exchange component of Rs 75 billion. However, the rupee component has been reduced by Rs 10 billion to Rs 865 billion, resulting in a total allocation of Rs 940 billion.

Seeking a Rs 200 billion increase in the PSDP 2024-25 allocations, the Planning Ministry faces a significant gap between requested funds and available resources. Notably, the release of funds for development projects under the Public Sector Development Programme for the current fiscal year has been suspended, with no authorizations issued from February to April.

During the first seven months of the fiscal year 2023-24, authorizations totaling Rs 507.980 billion were released by the Planning Ministry. However, no releases have been sanctioned since February, leading to a temporary halt in funding for development projects.

The delay in providing the IBC and the suspension of fund releases for development projects highlight the challenges faced by the Planning Ministry in meeting the increasing demands for funding. As the APCC meeting approaches, stakeholders await the allocation decisions that will shape the development landscape for the upcoming fiscal year.