Centre refuses development funds to reduce power sector debt

The Finance Division has refused to allocate funds under the Public Sector Development Programme (PSDP) in the ongoing fiscal year for reduction in loans of the power sector. During discussions in a recent meeting of the Economic Coordination Committee (ECC), the Power Division highlighted the background of the proposal. It told the forum that for loan adjustments, the authorisation of the Ministry of Planning was required. It said that PSDP allocation, in particular, was needed to reduce the loan portion, adding that it should be a non-cash adjustment. The Finance Division cited the limited fiscal space available in the current PSDP and suggested that the Power Division should re-submit the proposal in consultation with the Economic Affairs Division and the Ministry of Planning.