Development Spending in Next Budget Likely to be Rs. 950 Billion

The Planning Commission is in process of making a proposal for the Public Sector Development Program (PSDP) for a development budget of Rs. 950 billion, which is Rs. 50 billion higher than the previous year.

The Planning Commission of Pakistan has started working on two proposals for the upcoming PSDP 2022-23, well-informed sources told ProPakistani. Instead of waiting for the issuance of the Indicative Budget Ceiling from the Finance Division for the PSDP 2022-23, the Planning Commission has started working on two different proposals.

In the first working, the developmental budget is being prepared at the outlay of Rs. 950 billion, which is Rs. 50 billion above the original allocation of Rs. 900 billion in the PSDP 2021-22, the source said. In case the government decided to increase the PSDP for the upcoming fiscal year from the previous year, the commission should have all the preparatory work ready for it, the source added.

Another reason for keeping the developmental budget estimates at Rs. 950 billion is to provide more room for the allocation on account of the Foreign Exchange Component (FEC) of the PSDP. In the PSDP 2021-22, the FEC allocation was Rs. 100 billion but in the upcoming fiscal the government may further increase the FEC allocations, the source added.

Similarly in the second working, the allocations for development projects are being estimated on the outlay of Rs. 800 billion, which is Rs. 100 billion higher than the revised PSDP allocations of Rs. 700 billion for the FY 2021-22, the source said.

The source said that during the Planning Commission’s history, the developmental expenditure always remains well below the allocations and had never crossed Rs. 700 billion mark. As soon the Finance Division provides the Indicative Budget Ceiling for the PSDP 2022-23 the planning commission will adjust the allocations according to it, the source added.