Pak govt slashes development budget from Rs 280 bn to 180 bn

Unnecessary expenditure by the government too will be cut.

Updated: Jan 23, 2011, 21:31 PM IST

Islamabad: The Pakistan government has
slashed the development budget from Rs 280 billion to Rs 180
billion and more cuts would be made in the coming days,
Finance Minister Abdul Hafeez Sheikh has said.

Unnecessary expenditure by the government too will be
cut and the decision on reducing the Public Sector Development
Programme (PSDP) had been taken in the larger national
interest, Sheikh told businessmen at the Federation of
Pakistan Chambers of Commerce and Industry in Karachi.

The PSDP could be further cut to Rs 140 billion to
curtail the fiscal deficit, Sheikh said yesterday.

Pakistan is facing grave challenges like a rise in oil
prices, the impact of floods on the economy and a
deteriorating law and order situation, he said.

The rise in international oil prices posed a threat to
the country`s economy and any increase in oil prices was the
last option that the government had, he added.

In a separate meeting with journalists at the State
Bank of Pakistan, Sheikh said most of the government`s
expenditure is incurred on providing subsidies.

"Rs 256 billion alone was spent on subsidies," he
said.

The government will stick to its "best national
interest" stance in dialogue with the International Monetary
Fund, he said.

"It is in our own interest to also fulfil our
international commitments. We are continuing dialogue with IMF
and they are our development partners," he said.

PTI