The Finance Division has set an indicative budget ceiling (IBC) of Rs921 billion for the upcoming fiscal year’s federal development program, stated Federal Minister for Planning Ahsan Iqbal. He also disclosed that the federal budget for FY2025-26 will be unveiled on June 2, 2025.
“We have requested an Investment Budget Commitment (IBC) of Rs2.9 trillion, as per the requirements stated by various ministries and divisions; nevertheless, the Finance Division has allocated just Rs921 billion,” remarked Ahsan Iqbal at a press briefing held locally. During this same event, the Minister for Planning unveiled the monthly development update report for May 2025.
Regarding the PSDP for the current fiscal year, the minister mentioned that out of Rs1100 billion, approvals worth more than Rs900 billion have already been granted. It is expected that this authorization will increase even further in May and June of this fiscal year.
He mentioned that the Finance Division faces certain limitations since additional funds must be allocated to boost the development budget. To achieve this, he stated that they need to enhance the tax-to-GDP ratio.
The minister stated that the Annual Plan Coordination Committee meeting would take place on May 23, with the National Economic Council anticipated to convene either on May 26 or 27. Federal Minister Ahsan Iqbal announced that the federal budget presentation in the National Assembly is scheduled for June 2. He also mentioned that Rs2900 billion had been sought from the Ministry of Finance for the development budget of the upcoming fiscal year. Additionally, the Ministry of Finance allocated an IBC amounting to Rs921 billion for the same period.
He expressed worry over the allocation of such a minimal IBC, noting that it falls short by nearly Rs178 billion compared to the PSDP of Rs1100 billion for the current financial year 2024-25.
He mentioned that this would impact the flow of foreign currency. “To offer rupee protection for overseas-funded initiatives in the upcoming development budget, we require Rs700 billion. This implies that without sufficient rupee coverage, we won’t be able to use up the entire allotted Foreign Exchange Certificate [FEC] allocation,” he explained further.
Ahsan Iqbal stated that they would require a minimum of Rs 1600 billion for the upcoming fiscal year’s federal PSDP. He also mentioned, ‘We will raise the matter regarding the increase in IBC with the Prime Minister.’
He mentioned that due to the insufficient IBC, adequate funding won’t be possible for crucial initiatives, leading to postponements and increased costs for these programs. He also stated that the count of provincial ventures within the PSDP would decrease, and approximately 200 sluggish-progressing projects under the PSDP would be terminated.
He mentioned that because of delays, the cost of the Bhasha Dam rose from Rs 480 billion to Rs 1,500 billion. Likewise, he stated that the expense for the Dasu Hydropower Project jumped from Rs 500 billion to Rs 1,700 billion. According to him, multiple oversights occurred during the execution of the Dasu Hydropower Project. For this large-scale initiative, neither a project director nor a chief financial officer was appointed; instead, WAPDA personnel managed everything internally. Additionally, he pointed out that dollar-denominated contracts were used for constructing access roads within the project zone. The Dasu project had various discrepancies, and they insist that accountability must be established, as Ahsan emphasized.
Because of increased costs, the economic feasibility of these initiatives has decreased, he mentioned. Additionally, the minister stated that there were alarming instances of misconduct within the Neelum Jhelum Hydropower Project. This project commenced so hastily that the Neelum Jhelum contractor began work before the consultant was even ready, which is improper. Interestingly, during one meeting, when I questioned the CFO of Neelum Jhelum about their qualifications, I was astonished to learn they only held a Master’s degree in Geography,” disclosed Ahsan Iqbal.
He mentioned that they are awaiting the International Marine Corps’ report concerning the failure at the Neelum Jhelum Hydropower Project.
Regarding a query about why civilians aren’t considered for the role of Chairman at WAPDA, the federal minister responded stating, “Personally, I believe that a civilian with expertise in hydrology from an international perspective should take up this position.” He further noted, “I plan to advise the Prime Minister of Pakistan to nominate such a qualified individual.”
They are prioritizing these initiatives within the development budget as they align with the vision of Uraan Pakistan and aim to create job opportunities, stated Ahsan Iqbal. Previously, development partners would impose their preferences; now, they are being encouraged to support projects aligned with Pakistan’s needs rather than following external agendas. He mentioned that the CDWP recently endorsed programs connected to the Uraan initiative, projecting that this effort will lead to approximately 120,000 direct and indirect employment opportunities.
The provinces have been instructed to develop their strategies following Udan Pakistan, led by Ahsan Iqbal. According to the federal minister, provinces now possess more wealth compared to the federation, controlling 60 percent of the resources.
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