ISLAMABAD, June 2: The Punjab government has decided to retire around Rs15 billion debt of the federal government in the next fiscal year to create fiscal space and reallocate funds for accelerated development of social sector, especially health and education, Chief Minister Chaudhry Pervaiz Ellahi said in a meeting with Finance Minister Shaukat Aziz here on Monday.

The Punjab loan retirement strategy, he added, aimed at increasing fiscal space for increasing spending on the social sector by reducing its debt burden.

Mr Aziz welcomed the decision and said the federal government supported financial, structural and administrative reforms initiated by the provincial government and believed in devolution of power to enable the provinces to achieve macro-economic stability, increase pro-poor spending and begin economic development.

He appreciated Punjab government’s strategy to enforce fiscal management and new approach in planning. However, he emphasized that keeping in view the ground realities effective mechanism should be evolved to monitor outcome-driven implementation of development projects.

He said the government had decided to convene the NEC twice a year and quarterly Ecnec meetings to put in place an effective and coordinated mechanism of supervision to ensure that the benefits of projects reached the masses.

He said the provinces should evolve a targeted approach to create ownership for project implementation and focus on progress of major projects.

The finance minister emphasized transparency in spending on public sector development programme and hoped that Punjab would effectively utilize the fiscal space on social sector development.

They also discussed capacity-building to effectively utilize the funds allocated under the PSDP and details of forthcoming federal and provincial budgets.

Adviser to the chief minister, federal secretaries finance and economic affairs, chief secretary Punjab and senior officers of the ministry and Punjab attended the meeting.—APP