Manual for Development Projects - Planning Commission
Manual for Development Projects - Planning Commission
Manual for Development Projects - Planning Commission
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Chapter-1<br />
Thereafter, the PSDP is integrated with the national budget <strong>for</strong> consideration by the National<br />
Assembly.<br />
1.39 When allocation of development funds in the PSDP comes <strong>for</strong> consideration be<strong>for</strong>e the<br />
Priorities Committee meeting, it is decided on the basis of the availability of funds, past<br />
per<strong>for</strong>mance and the phasing set in the PC-I. The priority in the allocation of funds should be in<br />
accordance with the ranking of projects from the point of view of their economics, ie the<br />
internal financial rate of return (IFRR) and the internal economic rate of return (IERR) either<br />
after allocation had been made <strong>for</strong> each sector, say, water or even prior to that. However,<br />
sometimes the political and social objectives are to be met first through allocation of funds. For<br />
example, if primary or secondary or university education is to be promoted, the ranking on the<br />
basis of economic rate of return is not necessary. Similarly if regional development is required<br />
to be done (as a political objective) or infrastructure is to be laid or potable water and other<br />
utilities of essential nature are to be provided <strong>for</strong> improving the quality of life, then the rate of<br />
return would not be taken into account, though provision will be made at the stage of the<br />
approval of the project that maximum revenues be obtained after project execution so that at<br />
least the O&M cost of the project is recovered. Full discussion of how the appraisal of the<br />
project from the point of view of financial and economic analysis is to be done has been made<br />
in Chapter 5 of this <strong>Manual</strong>.<br />
1.40 During the financial year, if any agency requires additional funds <strong>for</strong> some of its projects<br />
<strong>for</strong> inescapable reasons, the agency approaches the <strong>Planning</strong> and <strong>Development</strong> Division<br />
(Programming Section) in either of two ways:<br />
(a) If some savings are available within that agency's PSDP allocation, it requests the <strong>Planning</strong><br />
and <strong>Development</strong> Division <strong>for</strong> re-appropriation. After consideration of the case in relation to<br />
the implementation of other projects, the <strong>Planning</strong> Division decides the case.<br />
(b) If saving is not available in the agency's allocation, it requests the <strong>Planning</strong> and<br />
<strong>Development</strong> Division to allow a supplementary grant. The <strong>Planning</strong> Division decides each<br />
case on its merit and then recommends it to the Finance Division.<br />
Trans<strong>for</strong>mation of Plan into Viable <strong>Projects</strong>/Programmes<br />
Page 9 of 13<br />
1.41 <strong>Projects</strong> are the cutting edge of development. By this is meant that, without projects, it is<br />
unlikely that general development plans which hasten economic growth and further a range of<br />
social objectives will be fulfilled. <strong>Projects</strong> provide an important means by which investment<br />
and other development expenditure <strong>for</strong>eseen in plans is incurred. Sound planning requires good<br />
projects, but effective project preparation and analysis must be set in the framework of a<br />
broader development plan. <strong>Projects</strong> are a part of an overall development strategy and a broader<br />
planning process, as such they must fit in appropriately. Within the broad strategy, analysis<br />
must enable the sponsoring agency to identify potential projects that address the policy of<br />
production targets and priorities.<br />
1.42 The general development plans, currently prepared in Pakistan, provide the general<br />
http://hd2/pc/popup/ch1_p.html<br />
9/23/2010