Finance Division Stalls Budget Ceiling Request for Development Projects in FY2022-23

The Finance Division has yet to respond to the Ministry of Planning’s request for enhancing the provisional Indicative Budget Ceiling (IBC) for the upcoming Public Sector Development Programme (PSDP) to Rs. 700 billion.

Till the last night (Wednesday night), Planning Commission was deliberating on next year’s development plan and was in the process to delay the APCC after getting Finance Ministry’s view and fine tune the PSDP.

The Finance Division has given the provisional Indicative Budget Ceiling (IBC) of Rs. 500 billion for the Public Sector Development Programme for the Fiscal Year 2022-23 (PSDP), but the Planning Commission wants to upward revise it, an official source told ProPakistani.

The Planning Commission has informed the Finance Division that it will be impossible to complete the ongoing projects or accommodate new ones with Rs. 500 billion, therefore, the IBC should be enhanced, the source said. In a letter to the Finance Division, the Ministry of Planning has asked for an increase of Rs. 200 billion in IBC to Rs. 700 billion, the source said.

Earlier, the priority committee used to finalize the PSDP proposals for various ministries and divisions, however, due to a shortage of time, the meeting of the priority committee has been skipped. Now the Planning Commission is reviewing proposals and recommendations by the members/technical sections in consultation with Ministries/Divisions. The development budget is being prepared based on Rs. 700 billion ceiling as the Planning Ministry is waiting for the Finance Division’s response, the source said.

The final working paper based on the proposals of the Planning Commission for the PSDP 2022-23 will be submitted to the Annual Plan Coordination Committee (APCC), which has been convened on 04 June 2022. APCC is a consultative body that gives recommendations to National Economic Council on macroeconomic and development framework.

To give final approval to PSDP and financial indicators for the next fiscal year, the meeting of NEC is to be convened on 07 June, the source said. It has been proposed that the rupee component of the PSDP is to stand at Rs. 600 billion, while the foreign exchange component will be Rs. 100 billion.

The source said that they are still waiting for a reply from the Finance Division. In case the Finance Division didn’t allow an increase in IBC, the allocations will be downward revised.