THE government reportedly has decided to slash the proposed Public Sector Development Programme (PSDP) by Rs250 billion for the fiscal year 2024-25 which is deeply concerning and warrants serious reflection. The PSDP, which forms the backbone of developmental projects across the country, has been reduced purportedly to create fiscal space for withdrawing certain taxes. This move will not only jeopardize ongoing and planned development initiatives but also raises questions about the priorities set during budgetary deliberations.
The PSDP is not just a financial allocation; it represents the hopes and aspirations of millions who rely on public infrastructure, social services and economic development programs. Cutting such a substantial amount from the PSDP inevitably means that numerous vital projects will either be postponed indefinitely or, worse, shelved altogether. This is a blow to progress and a setback to the promises made to the public. It is particularly disheartening that this decision comes under the guise of creating fiscal breathing room by withdrawing taxes. The question arises as to why these taxes were imposed in the first instance if they are now deemed unnecessary. It reflects a lack of foresight and planning on the part of those responsible for fiscal management. Budget preparation involves meticulous planning and extensive consultations; therefore, such drastic adjustments raise doubts about the efficacy of the entire budgetary process. In the current budget, the burden of taxes has fallen on the salaried class and the already tax-paying segments of society. They definitely deserve relief. Instead of cutting the PSDP, efforts should focus on broadening the tax base by including sectors that have historically evaded taxes, such as retail and agriculture. Bringing these sectors into the tax net could potentially generate the fiscal space needed without compromising on development goals. Furthermore, stringent measures to curb tax evasion and improve tax collection efficiency should be prioritized.
