The government should not consider making any cut in the Public Sector Development Program (PSDP) to divert funds to deal with the consequences of Great Floods 2010 as such a move will badly affect the growth of business and industry which are already suffering due to insufficient development of infrastructure.

This was said by Mr.Zahid Maqbool, President, Islamabad Chamber of Commerce & Industry (ICCI) in a statement. He said instead of slashing PSDP, government should work out other viable options  to mobilize funds for flood relief, rehabilitation and reconstructions activities.

Steps like adopting prudent financial management and ensuring strict observance of financial discipline could also help in avoiding wasteful expenditures and sparing funds for the restoration of flood-hit people.

He said rehabilitation and reconstruction of flood affected people and infrastructure will take at least couple of years and funds for such activities would be spent over medium term instead of one single year. Thus government could generate sufficient resources each year to meet the flood-related expenditures.

Mr.Zahid Maqbool said that government has allocated an amount of Rs.124 billion for “other development expenditures” including Rs.50 billion for Benazir Income Support Program and Rs.45 billion for Internally Displaced Persons.

Thus it has the option to earmark a sum of Rs.95 billion for the immediate flood-related rescue, relief and rehabilitation activities because these amounts were basically meant for the poor and displaced people. The proposed flood surcharge could also generate additional funds of Rs70-80 billion for the government to deal with flood consequences.

He said that the government has already reduced the size of the federal PSDP from Rs.421 billion last year to Rs.280 billion in 2010-11 and any new move to make further cut the already depleted development spending will push the country downwards in terms of development and economic growth.

Therefore, all possible efforts should be made to spare the PSDP from any cut and other suitable options should be envisaged to mobilize funds for flood-related expenditures, he said.