Provinces allowed to approve Rs1bn plans: Uplift funds not to lapse for three years
By Khaleeq Kiani
ISLAMABAD, March 15: The National Economic Council on Monday decided that development funds would not lapse for three years, and empowered provinces to approve uplift projects costing up to Rs1 billion.
The NEC meeting, which was presided over by prime minister Zafarullah Khan Jamali, also revised the GDP growth target from 5.5-6 per cent for the current year from the original target of 5.3 per cent in the wake of "robust manufacturing growth and higher than anticipated water availability" during the year for the agriculture sector.
After the meeting, Finance Minister Shaukat Aziz told reporters that the prime minister had also asked the provinces to finalize the sixth National Finance Commission award with consensus on a 'give-and-take' basis. He promised them that the federation would be flexible in raising provincial share in the divisible pool in the 45 per cent plus region.
The NEC decided to enhance the provincial governments' powers, enabling them to approve development schemes costing Rs200 million to Rs1 billion where the federal funding or federal government guarantees were not involved, increasing the provinces' independence in development priorities.
The finance minister said the NEC had directed the planning division and the finance ministry to accelerate releases. The meeting also decided that money earmarked for development projects would not lapse for three years as opposed to the current practice of their lapsing at the end of each year. Now allocations would automatically roll-over to the next year.
The finance minister dismissed the assertion that the non- lapsibility of development funds would give an incentive to the finance ministry to hold back releases to control fiscal deficit, saying the government was pretty comfortable on that front.
The prime minister also asked the provinces to develop a consensus on the distribution of resources among the provinces under the NFC, enabling it to incorporate its decision in the next year's budget.
He also stressed the need for financial discipline and emphasised socio-economic development in favour of the masses. Balochistan finance minister Syed Ihsan Shah later told this correspondent that provinces still called for the inclusion of Rs45-50 billion petroleum development surcharge in the divisible pool but the federal government did not agree.
NWFP's Chief Minister Akram Khan Durrani said he had expressed dissatisfaction over the slow movement of some projects, particularly the Gomal Zam dam, adding that work in this regard should be expedited.
He said the federal government had also agreed to start a joint review of provincial projects by the federal planning commission, expediting the ongoing projects in the provinces besides jointly clearing new projects.
He said the new projects forwarded by the provincial governments were normally held up in the planning commission and if the two sides could jointly oversee their approval and implementation, a lot of problems could be resolved.
He said the NWFP government had forwarded 45 new projects including big water reservoirs like Tank dam and Kaji dam. The Sindh Chief Minister Ali Mohammad Maher said the Sindh government had expressed concern over the slow pace of work on six major projects in the province and had called for accelerating their implementation.
Shaukat Aziz said the meeting was informed that per capita income was expected to rise to $600 by the end of 2004, adding Pakistan would then be categorized in middle-income countries group leaving its current status of being a low-income nation. The per capita parity price would also touch $2000 per annum by the end of the current year, he said.
He said the meeting appreciated that revenue collection during the first eight months was 15.3 per cent higher than the collection in the same period last year, manufacturing sector growth stood at 14.7 per cent against 8.8 per cent target and higher than target rice and sugarcane production.
He said all the fundamentals were looking strong and all targets would either be met or exceeded at the end of the year. He said the Ecnec and CDWP approved Rs343 billion worth of 80 development projects and Rs8 billion worth of 70 projects respectively during the first eight months of the current year.
He admitted that more than 70 per cent of projects, costing Rs100 million and above had no independent project directors and lacked internal monitoring.
