Shehbaz sees Rs700b PSDP insufficient.

ISLAMABAD -- Prime Minister Shehbaz Sharif on Tuesday instructed the relevant quarters to further increase the proposed allocation of Rs700 billion for the development budget for the next fiscal year after the planning ministry objected to a 'small size of the envelope', which appeared insufficient to propel economic growth in the country.

The prime minister gave the instructions to enhance the Public Sector Development Programme (PSDP) budget during the first review of an under-consideration Rs14.6 trillion budget for the fiscal year 2023-24.

The proposed size is over 50% more than this year's original budget.

According to sources privy to the discussions, the prime minister also directed the finance ministry to review the proposed salary increase for the federal government employees.

They said that the participants of the meeting also raised questions over the performance of the Federal Board of Revenue (FBR), which had failed to expand the tax base and plug the income leakages.

An official handout issued by the PM Office read that the premier had directed the officials to take all possible steps to provide relief to the common man in the upcoming budget.

'All resources should be utilised to reduce the financial difficulties of the poor and middle-class [group], it quoted PM Shehbaz as saying during the huddle.

Of the Rs14.6 trillion, the finance ministry has proposed only Rs700 billion for development spending for the next fiscal year, which is even less than the approved PSDP for the outgoing one.

'The amount of Rs700 billion is not enough to support the country's economic growth, as the public investment size has to be significant because of the current economic situation,' Federal Planning and Development Minister Ahsan Iqbal told The Express Tribune when contacted.

Pakistan's economy is passing through a difficult phase and various estimates indicate a contraction of up to 3% to a nominal growth of around 0.5% in the outgoing fiscal year.

The planning ministry is finally expected to approve a provisional economic growth figure for fiscal year 2022-23 on Wednesday (today).

'Our earlier projection of a negative GDP growth rate of 1% to 2% in 2022-23 will now need to be revised to a negative growth rate of 3% or more but the PBS (Pakistan Bureau of Statistics) is unlikely to fully reflect this in its initial estimates of the National Income Accounts for this year,' former finance minister Dr Hafiz Pasha wrote in an English daily on...