7 ` t HE decision of the federal planning and development ministry to prohibit the `re-appropriation` of development .m funds could be the first step towards reforming development spending. The ban will prevent line ministries from diverting money from budgeted schemes to unfunded ones under political pressure or any other reason, at least for now, thus slowing down the increase in the backlog of incomplete projects. The guidelines issued by the ministry make re-appropriation of funds stricter, requiring other ministries to use this authority preferably to complete projects which are ongoing rather than embarking on new ones. Additionally, the guidelines indicate that the rupee cover for foreign-assisted projects should only be to the extent of the costs incurred during the fiscal year. In a recent report, the IMF said that the Public Sector Development Programme is unaffordable and should be reassessed. The total cost of finishing the projects is Rs10.7tr, more than 14 times the allocation of Rs727bn in FY23. If the annual development budget remains the same and no new projects are added, the report adds, it will take around 14 years to complete the existing approved projects.

However, new projects continue to be added at a significant rate. For example, last year`s budget had new projects costing a total of Rs2.3tr. It is well-known that diverting money from one project to another due to political reasons or pressure from various lobbies results in huge costs and time overruns. It is common practice for the authorities to take out money from schemes meant for backward areas with weak political representation and spend it on politically motivated projects in the middle of the fiscal year, thus deepening the regional and sectoral development imbalance and leading to huge wastage of resources. With Pakistan facing a financial crisis, it is crucial to reform both federal and provincial development expenditure to prevent the country from turning into a graveyard for incomplete development schemes.