ISLAMABAD - The federal government Tuesday failed to get the Public Sector Development Programme approved from the National Economic Council as Sindh, KP and Balochistan CMs walked out of the meeting.

The provinces demanded the federal government approve the PSDP for only three months and not for the entire fiscal year. The provinces of Sindh, KP and Balochistan alleged the smaller provinces were neglected in the PSDP and their recommendations for the new projects not included in the federal developmental portfolio.

The government should only approve the developmental budget for three months and make allocations only for the running projects, Sindh Chief Minister Sindh Syed Murad Ali Shah said, addressing a press conference along with Khyber Pakhtunkhwa CM Pervaiz Khattak and Balochistan CM Abdul Quddoos Bizenjo.

All the three provincial chief ministers were of the opinion that the present government has no mandate to approve the budget for the entire fiscal year when its own tenure is expiring a month before the coming fiscal year.

Talking to media persons here after walking out of the NEC meeting, the Sindh chief minister announced his province will present supplementary budget for one quarter of the upcoming fiscal year.

KP Chief Minister Pervaiz Khattak said under no circumstances they will allow the government to approve the budget for one year. The Balochistan CM said they have asked the federal government to present the budget only for three months. The provinces also alleged their recommendations for new projects were not adjusted in the PSDP.

Murad Ali Shah said the NEC is a constitutional forum established under Article 156 of the Constitution and it has 13 members, including PM, four nominees of the federal government, four provincial chief ministers and their four nominees.

During the meeting, a total of nine people, including six representatives from the provinces, Prime Minister Shahid Khaqan Abbasi, Minister for Finance Miftah Ismail and Federal Minister for Planning Ahsan Iqbal, were present.

Punjab Chief Minister Shehbaz Sharif skipped the meeting despite being present in Islamabad, Murad Ali Shah said. “Shehbaz Sharif didn’t come to the NEC huddle. I don’t know whether he boycotted the meeting or missed it for some other reason,” he added. However, the provincial representative from Punjab was present. The share of small provinces in the new projects is negligible, he said. “Majority of our recommendations were not incorporated in the PSDP,” he said.

The provinces were told that after 18th Amendment the provincial developmental work comes under the domain of the provincial government. “We have asked the government to conduct voting on the PSDP as it is allowed by the Constitution, but we were told that there would be no voting as PSDP is the domain of the federal government only. We have then in protest walked out of the meeting and any decision in the absence of the three provinces will be illegal,” he asserted. “We have told the government to approve four-month budget for the running expenditure or at the most for ongoing important projects,” he maintained.

KP Chief Minister Pervez Khattak said the CCI has approved the KP and Punjab demand for the net hydle payment under AGN Kazi formula. The decision will help increase the province’s share from the current Rs 18 billion to Rs70 billion. He said the CCI has directed Wapda and Punjab and KP governments to resolve the issue in the light of AGN Kazi formula.

Meanwhile, the Planning Ministry said the NEC is only an advisory body and developmental budget is only part of the finance bill to be approved by the National Assembly. It said it is necessary to approve the PSDP for the entire year. Besides, the imposition of taxes and policies for three months is not possible.

He said after 18th Amendment, the provincial schemes have come under the domain of the provinces and the federal PSDP is limited to national infrastructure only. Some of the provinces wanted to include the provincial schemes in the federal PSDP which was not possible, it added.

Rs 2,043b development outlay finalised

Meanwhile, the federal government finalised total development outlay of Rs 2,043 billion for the next fiscal year, including Rs 1,030 billion for PSDP and Rs 1,013 billion for provincial ADPs.

According to the working paper presented by the federal government to the National Economic Council (NEC), the proposed national development outlay is Rs 2,043 billion, including federal PSDP of Rs1,030 billion for 2018-19, Rs180 billion of foreign aid, Rs 100 billion in PPP mode and the remaining Rs 1,013 billion for provincial ADPs.

Of the total federal development outlay of Rs 1,030 billion, a major portion will go to the communication sector followed by TDPs and security enhancement. The highest priority has been accorded to the transport and communication sector with an allocation of Rs 400 billion which include Rs 310 billion for national highways, Rs 39 billion for railways and Rs 44 billion for other projects like Gwadar International Airport and other aviation schemes. In 2018-19, new projects costing Rs 835 billion will be added to the CPEC and its supporting projects while 31 projects for the development of Gwadar are part of the proposed PSDP 2018-19 with an estimated cost of Rs 137 billion.

In the water sector, the proposed allocations in 2018-19 were increased from Rs 36 billion to Rs 65 billion which also include Rs23 billion for Bhasha Dam and Rs 2 billion for Mohmand Dam.

The power sector has a proposed allocation of Rs 80 billion or 9 percent, transport and communications Rs 400 billion or 43 percent, water Rs 65 billion or 7 percent, social sector, education (including higher education) Rs 57 billion or 6 percent, health and population welfare Rs 37 billion or 4 percent, Pakistan SDGs community development programme Rs 5 billion or 1 percent, science and information technology Rs 12 billion or 1 percent, governance Rs 18 billion or 2 percent, special areas (AJ&K, GB, Fata) Rs 72 billion or 8 percent, production Rs 5 billion less than one percent, Erra Rs 8 billion or one percent, TDPs and security enhancement etc Rs 105 billion.

To bring Fata in the mainstream, 10 years Fata development plan with a total outlay of Rs 100 billion has been approved by the government. During 2018-19, Rs 10 billion have been proposed for the implementation of the plan.

To bridge the gap between demand and supply of financial resources, the NHA has been requested to undertake at least Rs 100 billion projects during 2018-19 on public-private partnership (PPP) mode of financing. To assist the private sector, the government would finance feasibility studies for which Rs 5 billion have been allocated.

Construction of 100 stadiums and 400 vocational institutes across Pakistan is also part of the PSDP which will be funded on a 50/50 basis by provincial and federal governments.