Digging deeper development holes to nowhere

The Public Sector Development Programme (PSDP) ought to catalyse long-term growth through strategic infrastructure investments, yet its balance sheet is a cautionary tale in capital misallocation. Even though PSDP allocations are capped at Rs1 trillion, the legacy “throw-forward” of already-approved schemes tops Rs10tr. This is worth more than 10 years of PSDP outlays, even if not a single new project was added. Effectively, there are zombie projects that continue to exist, with menial allocations annually, which are not sufficient to enable successful completion of the projects but just enough to keep them alive on paper. It is estimated that around Rs3.27tr were demanded this year, 3.3 times greater than the fiscal ceiling. Due to a large number of projects, there have been many token allocations, some even as low as Rs10 million across dozens of schemes.