2 weeks Ago By Fawad Yousafzai
Planning and execution of foreign-funded projects discussed. ISLAMABAD - The lack of rupee cover allocation in the federal development budget is the main hurdle in the utilisation of foreign funds for developmental projects. The flow of foreign exchange is much higher than the rupee allocations for the development budget, against the foreign exchange component, which create problems in the utilisations for donor funded projects, official source told The Nation.
During the previous fiscal year 2023-24, against the rupee cover of Rs 70 billion, against the FEC component of the projects, the flow of foreign funds were almost double, the source said. A meeting of the Prime Minister’s Committee for Planning and Execution of Foreign-Funded Development Projects was held here with Federal Minister for Planning, Development & Special Initiatives Ahsan Iqbal in the chair. Sindh Assembly passes resolution in favour of 26th Amendment The meeting was attended by Secretary Planning Awaise Manzur Sumra, Secretary Economic Affairs Division (EAD), Member Infrastructure, Waqas Anwar and senior officials from the Ministry of Planning.
Federal Minister for EAD Ahad Cheema participated via video link, said a press statement issued meanwhile by the Planning Ministry. The committee discussed in detail the planning and execution of foreign-funded projects and the need to refine policy guidelines in line with the Economic Coordination Committee’s (ECC) decisions. During the briefing, it was highlighted that the challenges posed by scarce resources and huge demand for development projects needs to be address during the financial year.
The ministries demanded Rs 2,900 billion whereas approved development budget was Rs 1,100 billion. The PSDP currently stands at Rs 1,100 billion, with an allocation of Rs 220 billion in foreign funding as rupee cover. The financial constraints have led to a 10 times increase in the throw-forward, alongside administrative and implementation challenges.
He highlighted that over the past years the pie of development portfolio is squeezing contrary to increasing demand for development infrastructure. Moreover, adjustment of fiscal targets the development budget is shrinking. Youth killed after armed motorcyclists open fire on car Minister Ahsan Iqbal stressed the importance of preparing plans that address the minimum essential requirements of ministries to ensure timely disbursement of funds.
He emphasized that all projects should demonstrate robust economic and financial rationale, given the current balance of payments challenges. He also called for the establishment of a mechanism to reduce financial burdens and ensure practical implementation. Minister Iqbal further added that all PSDP projects, including foreign-funded initiatives, need execution within the specified timelines and clear ownership to avoid cost and time overruns.
He stressed the importance of carefully managing economic and financial risks associated with foreign-funded projects, as exchange rate fluctuations can significantly impact loan repayments, increasing the burden on government finances. In his concluding remarks, Minister Ahsan Iqbal directed EAD to come up with a realistic demand of budget in consultation with respective Ministries/Divisions which will be deliberated with ministry of Finance to arrange required funds for development projects. ‘NHA Sindh’s revenue target should be set at Rs25b for current financial year’ Tags: lack rupee cover allocation.
