Leading Issues in the Economy of Pakistan: Agenda for Reforms Based on rapid implementation of measures identified in Chapter 15 of the book on mobilization of revenues, there is a dire need for raising the level of development spending by the Federal and Provincial governments combined to at least 4 percent of the GDP. The priorities in the enlarged developed program should be on augmentation of water resources through early completion of dams and on investment in upgrading and modernizing the electricity distribution system. These sectors should be given higher priority and allocations as compared to highways, which have traditionally enjoyed the highest priority. 17.2 The‘Spreading Thin’ of Development Spending There are major issues today with the development planning, project approval and execution process, especially at the Federal level. The increasing budget deficit has implied large cuts in the Federal PSDP. It was budgeted at Rs 900 billion in 2021-22. However, the actual development spending was cut down by more than 50 percent to only Rs 400 billion. Nevertheless, there continues the practice of including new projects in the PSDP. This has result in a big‘spreading thin’ of implementation of projects, both in terms of financing and execution capacity. Table 17.2 gives details of number of development projects in the Federal PSDP of 2022-23. There are in the development portfolio as many 1219 projects. The throw forward of on­going projects is over Rs 10000 billion, while the allocation to on-going projects is only Rs 516 billion. In effect, each project will take almost 19 years to be completed. This delay will lead to further increase in project costs. Table 17.2: Key Statistics on the Federal PSDP, 2022-23(Features of Large Investment Sector) No. of New On-Going Schemes Schemes Est. Cost (Billion Rs) Throw forward (Billion Rs) Allocation (Billion Rs) Ratio* % to New Projects Higher Education 13 138 382 271 Commission 44 7.1 13 Railways 4 35 1261 1207 33 44.7 18 Water Resources 58 74 3336 1933 181 21.5 50 National High Authority 46 64 2504 1235 117 11.0 6 Power 7 31 78 63 24 3.5 27 TOTAL OF ABOVE 128 342 7561 4709 400 15.2 23 *Ratio of throw forward to Allocation Source: Federal PSDP* 174