The federal and provincial governments are set to discuss the transfer of federal Public Sector Development Program (PSDP) projects to their respective provinces.
Sources told ProPakistani that the interim federal minister for planning will discuss the plan with provincial chief ministers on Monday.
The federal government is trying to implement the approved policy of National Economic Council (NEC) in which the federal government would finance provincial projects in exceptional cases on a 50:50 cost-sharing basis.
Presently, the federal government had allocated Rs. 1.37 trillion for 357 projects in the provinces, while the PDM government had earmarked Rs. 314 billion (33 percent of financial resources) for provincial projects in the federal PSDP 2023-24.
It is noteworthy that the 18th Constitutional Amendment and 7th NFC have enhanced provincial autonomy and financial strength, enabling them to initiate devolved subjects through their Annual Development Programmes (ADPs).
Recently, the federal government has informed provincial finance ministers that crucial national strategic projects are not receiving funding due to resource constraints, leading to cost and time overruns, and ultimately depriving them of accrued benefits.
Despite resource constraints, the federal government continues to allocate substantial funding to Azad Jammu and Kashmir, the Gilgit-Baltistan government, and the merged districts of Khyber Pakhtunkhwa, recognizing its federal responsibility and commitment.
Sources said that the planning and development division has proposed to exclude 137 non-starter projects with zero financial progress from the PSDP 2023-24, resulting in savings of Rs116 billion.
Additionally, it also proposed not to release Rs29 billion remaining funds for the Sustainable Development Goals Achievement Programme (SAP) during this year.
Furthermore, the planning commission is also planning to consider shifting 49 projects with financial progress from 0 to 20 percent to respective provinces for further financing through ADPs or defer them, saving an additional Rs. 29 billion.
The federal government will prioritize completing the 20 projects with over 80 percent progress during the current fiscal year through re-appropriations/adjustments.
Approximately 150 projects with financial progress between 20 percent to 80 percent will be critically reviewed by provinces and completed subject to resource availability, including provincial contributions, the sources said.
