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Centre to stop funding for provincial projects from next fiscal

Posted on: Mon March 08, 2010

ISLAMABAD: The federal government has decided to stop funding of development projects of provincial nature from the next fiscal keeping in view the increased financial resources for the federating units following the NFC Award.

An exercise is underway at the federal level to abolish around 200 to 300 development projects worth billions of rupees from the list of Public Sector Development Programme (PSDP). These development projects would either be shifted on the funding of respective provincial governments or abandoned if the federating units considered them unviable projects, official sources told The News here on Sunday.

If the government succeeds in abolishing the Concurrent List and shifting certain subjects to the provinces through the 18th Amendment in the Constitution in accordance with the recommendations of the Parliamentary Committee on Constitutional Reforms, then the Centre would be bound to abandon these subjects that would pave the way for abolishing its allocations as well. An official in the Planning Commission told The News that an exercise was under way to rationalise the PSDP list as the cost of over 2,300 development projects had already crossed Rs 3 trillion mark.

The Executive Committee of National Economic Council (Ecnec), an official said, assigned the authorities concerned to rationalise the PSDP meant for the ongoing financial year, identify those projects which could be abolished and prepare the list of projects which could be shifted to the provinces from the next financial year. He said the cost of the existing list of the PSDP projects crossed Rs 3 trillion mark, out of which, Rs 1 trillion were required to construct the Diamer-Bhasha Dam. The Planning Commission is also finding out the ways and means to arrange the financing for the Bhasha Dam from the budget resources as the ADB is ready to extend financing for this multi-billion dollar project. The official said the federal government planned to convene a meeting of the provinces in order to sort out development projects that would be shifted on the funding of the provinces from the next financial year.

Answering a query about making efforts for decreasing throw forward having cost of Rs 3 trillion, he said they made efforts and excluded around Rs 280 billion projects from the list of PSDP during the last fiscal. Now, this exercise will be kick-started soon and within two months efforts will be made for making progress in this regard.

He said after excluding the Bhasha Dam, the throw forward of PSDP stood at Rs 2 trillion and efforts would be made to slash it further by Rs 300 to 400 billion.

When contacted, Secretary Finance Salman Siddiq told this scribe that an exercise was underway for rationalising the PSDP for the current financial year under which the PSDP would be standing around Rs250 to 280 billion keeping in view the resource position.

Courtesy : The News