ISLAMABAD: In order to battle worst flooding across the country which has submerged about 1/3rd area of Pakistan and affected about 33 million people, the Federal Government has planned to cut Rs150 billion from the Public Sector Development Program (PSDP) and redirect the funds to flood-affected areas for rehabilitation and reconstruction.
The government is making efforts to restart the stalled IMF programme and it is struggling to find fiscal space to divert massive funds to flood-affected areas. Initial estimates suggested that Pakistan suffered a massive economic loss in the range of $10 to $12.5 billion as a result of the devastating floods.
Officials from Finance Division have confirmed that Ministry of Planning had held consultations in the last few days and was preparing recommendations. The officials said, the government will cut the federal PSDP by Rs100 to Rs150 billion in order to reduce allocations from Rs800 billion to Rs650 billion for the current fiscal year.
“These development funds of Rs150 billion will be diverted to flood-affected areas where there is no possibility to execute development projects in the existing circumstances,” said the official.
The Ministry of Planning has been engaged to identify projects where the allocation of funds would be cut down and the exercise would be made in consultation with relevant ministries or executing departments.
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