ISLAMABAD - Bulk allocations of around Rs80 billion are likely to vanish in the upcoming PSDP 2018-19 as the government is all set to slash the ceiling for developmental portfolio by almost 25 percent.

The federal government has initially set the Public-Sector Development Programme ceiling at Rs750 billion during the fiscal year 2018-2019, which is 25 per cent less than previous year development portfolio of Rs1,000 billion, official source told The Nation here Wednesday.

The source however said that the reduction in the developmental portfolio is not going to affect the ongoing projects as the bulk allocations in PSDP 2017-18 will not be included in the upcoming PSDP.

For example the source said that energy for all and clean drinking water for all are two projects with the allocation of Rs25 billion, Special Federal Development Programme, Rs 40 billion, Prime Minister Youth Initiative Rs20 billion.

When asked about the allocation of Rs45 billion for IDPs and Rs45 billion for the security enhancement, the source said that although IDPs issue is almost resolved but he is not sure about their inclusion in the upcoming PSDP.

The PSDP ceiling is good for election years, as three months of the fiscal there will be caretaker government and the really spending will start by November.

Beside the government don't want to give the impression that the budget was political motivated and aim at election campaign.

For the PSDP 2018-19 the government has set few principles which includes, inclusion of new projects with the allocation of 25 percent cost, the remaining allocations for all those projects where 70 percent work has been done, the allocation of local currency component to foreign funded projects and prioritize the CPEC projects.

Source told The Nation that the Ministry of Planning, Development and Reforms had informed the ministries and divisions that any new project could only be added in the upcoming PSDP, if it had 25 per cent allocation of the total cost.

The source further informed that usually the priority committee finalizes projects for inclusion in the PSDP, but this year the meeting of the priority committee is not taking place due to shortage of time as the government is all set to announce the Budget 2018-2019 on April 27, which is almost a month ahead of its routine time.

The tenure of the incumbent government expires on May 31st and the government and the opposition are in agreement to pass the finance bill prior to their departure.

Instead of priority committee, earlier this week, the Ministry of Planning, Development and Reforms had started meeting the ministries/divisions in phases and discussed their running projects, completed work, new projects and the PSDP ceiling. Today (Thursday) discussion with all the ministries will be completed, the source said.

The official said that the finance ministry had given the PSDP ceiling of Rs750 billion for the fiscal 2018-2019, which was 25 per cent less than previous year developmental portfolio.

However, the source said that the government might upward revise the ceiling.

When asked about the pre-requisite of 25 per cent allocation for inclusion of new projects, the source said the condition was set as earlier the ministries used to allocate a token amount of Rs5 or 10 million for the projects worth hundreds of millions of rupees.

The allocation of token amount results in the delaying of the projects and overrunning its cost. To discourage the trend of token allocation and timely completion of the project the step was taken, the official maintained.

The ministries and divisions were asked to prioritize those projects where 70 per cent work had already been done, and for their early completion, they should allocate the remaining amount in the coming PSDP.

It was further asked by the Planning Ministry from the ministries/divisions that allocated the local currency component of foreign-funded projects must be allocated in the PSDP.

In case of non allocations of local financing usually the foreign donors are reluctant to provide their share, the source said.