ISLAMABAD - Planning Minister Ahsan Iqbal stated on Tuesday that the federal government does not seek to reduce the provinces' share under the National Finance Commission (NFC) Award but emphasized that the Benazir Income Support Programme (BISP) should be funded jointly by the provinces.
“BISP is a good initiative on which over Rs800 billion is being spent,” Ahsan Iqbal told the Senate Standing Committee on Planning. “We are not saying BISP should be shut down. We are only saying a decision must be taken whether the federation or the provinces will fund it.” The first session of the budget follow-up meeting of the Senate Standing Committee on Planning, Development and Special Initiatives was chaired by Senator Quratulain Marri.
The minister said no new development projects, except those related to defence and security, would be initiated in the next fiscal year due to financial constraints. “Not increasing the Public Sector Development Programme (PSDP) is a national security challenge,” Iqbal warned, adding that development was being compromised.
Ahsan Iqbal noted that 74 per cent of resources were consumed by debt servicing. “Today, after 2017-18, we are stuck at a PSDP of Rs1,000 billion,” he added. Due to a shortage of funds, national projects are not receiving full allocations. “Financing for Azad Jammu and Kashmir and Gilgit-Baltistan also rests with the federation,” he said.
On the post-18th Amendment fiscal arrangement, the minister said it placed an “unfair burden” on the federal government. Regarding water infrastructure, Ahsan Iqbal stated that major dams remain underfunded in the PSDP. “For Diamer-Bhasha Dam, Rs170 billion should have been allocated, but we could earmark only Rs15 billion for the next fiscal year. For Dasu, instead of Rs100 billion funding demand, only Rs22 billion could be allocated,” he said, adding that funds should have gone to Diamer-Bhasha and Mohmand dams.
Senator Shahadat Awan of the PPP defended BISP, saying even the World Bank had lauded the programme. “We condemn those who call the Benazir Income Support Programme a scheme to create beggars. The morale of 10 million beneficiaries should not be undermined,” he said. “BISP is our red line,” Awan asserted, adding that the discussion should not be limited to a single programme.
Iqbal reiterated that the government had no intention of closing BISP. “We are absolutely not talking about shutting down BISP,” he clarified. Ahsan Iqbal highlighted the decline in development expenditure from 2.6 per cent of GDP in 2018 to 0.6 per cent at present.
Secretary Planning informed the committee that, in line with government policy, no new development schemes had been included in the PSDP except those relating to national defence and security under the Ministries of Defence and Interior, as well as projects with foreign-funded components.
Officials from the Ministry of Commerce briefed the committee on the Quetta Expo Centre project, stating that substantial funding was required for its completion. Against a requirement of Rs3,735 million, only Rs89 million had been allocated in the PSDP 2026–2027. The chairperson recommended that, upon completion of due diligence and resolution of location-related issues, the requisite funds may be considered for allocation during the financial year.
Officials from the Ministry of Defence informed the committee that, owing to defence and national security considerations, the ministry had proposed 12 new schemes in addition to its 19 ongoing schemes. The Ministry of Defence Production informed the committee that it currently has two ongoing projects: the upgradation of Karachi Shipyard and the establishment of a Project Management Cell in Gwadar for the development of a shipyard.
During the second session of the meeting, the committee discussed the status of ongoing development projects under the Finance Division and provincial governments. Officials of the Finance Division briefed the committee that the division is undertaking five major projects and that funds have been allocated for the upcoming financial year. Upon inquiry by the chairperson regarding additional financial requirements, officials stated that further funds would be needed to meet project demands. The committee was informed that the Modernization and Upgradation of Pakistan Mint (Phase-IIA) project is expected to be completed during the current year.
While discussing schemes relating to Provinces and Special Areas under the demand of the Finance Division, the chairperson expressed concern over the slow pace of implementation and questioned the likelihood of their timely completion. The committee was further briefed by officials of the Ministry of Information Technology and Telecommunication that the ministry has eleven ongoing projects. Two new schemes had also been included in the PSDP, as they pertain to national security-related initiatives.
While discussing schemes under the Ministry of Interior and Narcotics Control, the committee was informed that eight new schemes had been included in view of security and defence requirements, in addition to 21 ongoing schemes. However, the committee expressed surprise that the Margalla Avenues Link Road to M-1 had also been included among the new schemes, despite not falling under the category of security and defence. The committee observed that this inclusion was contrary to the government's stated policy of limiting new schemes to those related to defence and security requirements, and recommended the deletion of the said scheme.
