The total allocation for Pakistan’s national Public Sector Development Program (PSDP) has been set at Rs1,324 billion for the fiscal year 2020/2021, according to budget documents released on Friday. This allocation represents an 18 percent decrease compared to the Rs1,613 billion allocated in the outgoing fiscal year.
The PSDP is the government’s primary tool for enhancing the socio-economic conditions in the country and achieving macroeconomic and development goals. It is designed to yield maximum benefits for society in the shortest possible time by funding critical projects and initiatives.
For the fiscal year 2020/2021, the National Economic Council (NEC) has approved a PSDP size of Rs1,324 billion, which constitutes 2.9 percent of the Gross Domestic Product (GDP). The reduction in the PSDP allocation reflects the government’s need to manage resources more efficiently amidst economic challenges.
The salient features of the PSDP allocation for 2020/2021 are as follows:
1. Overall Reduction: The national PSDP for 2020/2021 has been reduced by 17.91 percent compared to the budget estimates of 2019/2020.
2. Federal PSDP: The federal component of the PSDP has been set at Rs650 billion, which is 7.27 percent lower than the previous year’s budget estimates.
3. Federal Ministries/Divisions: The share allocated to federal ministries and divisions has increased by 20.22 percent to Rs418.67 billion, indicating a focused effort to enhance the functioning of key governmental bodies.
4. Corporations’ PSDP: Allocations for corporations have been set at Rs158.32 billion, reflecting a 19.94 percent decrease from the previous year’s budget.
5. COVID Responsive and Natural Calamities Program: A significant amount of Rs710 billion has been allocated to address COVID-19 and other natural calamities, highlighting the government’s priority in tackling current and future emergencies.
6. ERRA: The Earthquake Rehabilitation and Reconstruction Authority (ERRA) has been allocated Rs3 billion to continue its recovery efforts from past disasters.
7. Provincial PSDP: The provincial PSDP for 2020/2021 is estimated at Rs674 billion, a 26 percent decrease from the Rs912 billion allocated in the previous year.
The reduction in the PSDP allocation underscores the government’s efforts to balance developmental needs with fiscal prudence. By prioritizing critical areas such as pandemic response and disaster management, the government aims to maximize the impact of its limited resources. The revised allocations also reflect a strategic shift towards more targeted and efficient use of funds to foster sustainable development in Pakistan.
