KARACHI - The target of new Public Sector Development Programme of Rs 549 billion for the coming fiscal seems ambitious, which may not be achieved in 2008-09 due to prevailing fiscal imbalances and huge subsidy pressures. The federal government has announced a record Public Sector Development Program by allocating Rs 549 billion for development-related projects for the next fiscal year budget 2008-09. The amount of allocation in PSDP had been increased from Rs 520 billion to Rs 549 billion for the budget 2008-09.   However, most of the development economists are forecasting a PSDP target in the range of Rs450 and 460 billion in next fiscal. Keeping in view of worsening domestic macroeconomic environment, unsatisfactory economic indicators/fundamentals and growing fiscal imbalances, the said target (revised allocated size) of the PSDP seems difficult for the government to achieve. A development expert said the government is already burdened being provided by heavy subsidies on POL products and food commodity items therefore; current account and budgetary financing would be a great challenge for it in spite of allocating hefty amount of money in development programs. The said PSDP target is quiet unrealistic and it is a six million dollars question how long our government would afford these expenditures due to the country's rising fiscal deficit Earlier, a week ago, NEC (National Economic Council) set target of Rs541bn for Budget FY09, an increase of 4% from last year's Rs520bn. Similar to Budget FY08, the government has announced a number of infrastructure development projects like extending of existing dams and building of new ones. Already, NEC in its meeting allocated Rs166bn for the infrastructure sector and Rs10bn has been allocated for the national program to develop 314 small dams across the country. The program is estimated to take over 4 years to complete and its total cost to stand around Rs54bn. As per Medium Term Development Framework 2005-10, Planning Commission has set 7.9% construction sector growth target for FY09. According to the Economic Survey for the year 2007-08, development spending has grown at a much faster pace than social sector and poverty- related expenditures, its pace has over thrice the speed of growth in defence spending. During the last eight years, development expenditure improved from 2.2 percent of GDP or Rs 89.8 billion in 2000-01 to 4.5 percent of GDP or Rs 394b in 2006-07. Development expenditure is budgeted at 5.6 percent of GDP or Rs. 561 billion for FY07-08. The second largest component of current expenditure, namely, defence spending remained stagnant at around 3 percent of GDP during the last five years, and stood at Rs 275.0 billion in 2007-08. This shows that the Government is focused on removing infrastructural bottlenecks and building physical assets. The Government is also committed to achieving the goal of fiscal stabilization without compromising its spending on the social sector. Non-defence-non-interest expenditure has improved from 7.7 percent of GDP or Rs 95.6 billion in 1999-2000 to 12.3 percent of GDP or Rs 1225.1 billion in 2007-08.