Prioritizing Development Spending Chapter 13: Prioritizing Development Spending Chapter 1 has highlighted the big decline in the level of development spending from 5 percent of the GDP in 2016-17 to 2.6 percent of the GDP in 2020-21. This has increased the need for better prioritization of development spending to have the maximum and far­reaching consequences on economic growth. Therefore, the objective of this Chapter is to highlight how the PSDP of the Federal and Provincial Governments should be managed to ensure the optimal allocation of funds to different sectors of the national economy. 13.1. Level and Composition of Development Expenditure The budgeted and actual level of development spending in the budget documents at the Federal and Provincial levels is shown in Table 13.1. During the period 2014-15 to 2019-20, the peak level of development spending was attained in the year 2016-17, at 5 percent of GDP. 46 percent of the expenditure was at the Federal level and 54 percent by the Provincial Governments. Thereafter, the level has fallen sharply to only 2.6 percent of the GDP in 2019-20. Table 13.1: Budgeted and Actual Development Expenditure by the Federal and Provincial Governments(Rs in Billion) Federal PSDP Budgeted Actual % Deviation Actual (% of GDP) Provincial ADPs Budgeted Actual % Deviation Actual (% of GDP) Total (% of GDP) 2014-15 525 489-7 1.9 650 499-23 1.8 3.7 2015-16 700 593-15 2.0 814 592-27 2.0 4.0 2016-17 800 725-9 2.3 875 852-3 2.7 5.0 2017-18 1000 578-42 1.7 1112 880-21 2.6 4.3 2018-19 800 502-37 1.3 850 509-40 1.2 2.6 2019-20 701 468-33 1.1 792 621-22 1.5 2.6 Source: MOF 131