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Hamza Committee decides to divert Rs66 billion to new projects

ISLAMABAD: Prime Minister Nawaz Sharif has constituted a high-powered committee under chairmanship of Hamza Shahbaz on rationalising Public Sector Development Programme (PSDP) and it has already finalised its recommendations under which Rs66 billion will be diverted from slow moving to fast moving projects or new projects this year.

The Hamza committee was given the mandate to rationalise PSDP without slashing down its overall allocated amount, which had already been scaled down by Rs115 billion, bringing it down from Rs540 billion to Rs425 billion, because of non availability of bloc allocations.

“The mandate of the committee was diverting resources towards fast moving projects without cutting down its allocated amount,” said the sources.It was also mandated to recommend to the government to continue those projects of defunct People Works Programme (PWP-II) which were canceled by the government in the budget meant for discretionary development funding with the PM.

The politically motivated schemes will be identified and abandoned but those schemes will continue which will have high return for the national economy.The PSDP amount was slashed when the Finance Division conveyed officially that bloc allocation of Rs115 billion could not be released in the wake of its linkage with the FBR’s desired revenue collection of Rs2,475 billion and apparent revenue shortfall in materialising the desired target.

So the PSDP was already slashed down from Rs540 billion to Rs425 billion on account of abandoning bloc allocation of Rs 115 billion.The high-powered committee comprises MNAs and senators belonging to ruling coalition government. The committee had recommended diversion of PSDP to the tune of Rs90 billion but the planning managers did not agree to this amount and through a joint review they convinced them to restrict such diversion to the tune of Rs66 billion.

Minister for Planning, Development and Reforms Ahsan Iqbal said the government had filed a review petition in the Supreme Court for re-appropriation of development funds.He said the allocated amount of Rs425 billion on account of PSDP would not be slashed down but certain resources would be diverted towards those projects which would be beneficial for the economy and are nearing completion. There are certain projects which cannot be completed either because of security environment or any other reason so resources in those cases will be diverted towards fast moving projects.

The sources said that the committee finalised its recommendation to decrease the PSDP allocation on the account of bloc amount of Rs115 billion which was linked with achieving FBR’s tax collection target of Rs2475 billion. As it becomes clearer that the FBR is not going to achieve its desired target, so this bloc allocation of Rs115 billion is no more part of PSDP.

Planning Commission spokesman Tuesday said they presented their work to the committee which would now finalise its recommendations to rationalise the PSDP.The pace of development spending has been slow as the government utilised Rs120 billion on development programmes in the first six months, restricting the expenses to 22% of the annual development budget of Rs540 billion. It indicates that the government could not utilise the allocated amount of Rs425 billion in the second half of the current fiscal year.
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