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Punjab medium term plan to target 7pc growth

May 12, 2014

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— File photo
— File photo

The Punjab government is formulating a medium-term development framework that is expected to be implemented from the next financial year. The major objectives of the framework, according to one of its authors, are to boost inclusive economic growth and social sector development in the province to create jobs for absorbing new labour force entering the market every year.

The authors of the draft refused to disclose their names and share the details of the strategy they have formulated unless it was approved by Chief Minister Shahbaz Sharif. They, nevertheless, claimed that the implementation of the proposed strategy would ‘mark a major change’ in the development priorities of the provincial government.

“If the chief minister agrees to the framework and the strategy for its implementation, you would see a big shift in the government’s spending focus in favour of the social sector to boost economic growth in the province to at least 7pc,” one of the authors of the framework noted.

“But the success of the strategy will largely depend on the government’s ability to remove the shortages (of energy and infrastructure), facilitate and promote the private sector and provide larger fiscal stimulus.”

A Punjab Planning and Development Department (P&DD) official told Dawn that the government had set up three different committees to recommend changes in the province’s development strategy. “The chief minister is expected to meet the members of these committees and take their input in the next few days before we start putting together our development for the next financial year,” he said.

He said the next year’s development allocation was expected to be somewhere between Rs300-350bn and the government was unlikely to shift its focus from the mega infrastructure projects like metro bus service in Rawalpindi or Ring Road in Lahore to lure middle-class urban voters as it still feels significant threat from Imran Khan’s Pakistan Tehrik-i-Insaaf (PTI) which is on the streets to protest against rigging in last year’s elections. Yet the government is trying to reduce share of block, unassigned allocations in the development programme from the next year. “We will try that the major chunk of the funds is allocated against approved schemes,” he said.

“It all depends on resources that will be available to the province under the National Finance Commission (NFC) award or through its own revenue mobilisation efforts. Nothing is finalised at this point in time.”

The development allocation for the ongoing year was estimated 32.3 per cent of the total budgetary outlay and over 16 per cent greater than the actual estimates for the last year.

Officials insist that the pace of development had picked up in the province during the last four months. “I agree that the pace of development funds utilisation was pretty slow during the first half of the present financial year to December. It was because the money was being released through the Chief Minister’s Office. Since January, the development funds have again been transferred to the P&DD, helping it push completion of the project,” the official contended.

The progress report prepared by the P&DD on the releases and utilisation of Annual Development Programme (ADP) funds in the first three quarters of the present fiscal year shows that only Rs85.78 billion were utilised by the end of March from the budgeted development plan of Rs290 billion (including a shortfall of Rs30 billion) for 2013/14, which has now been cut down by a hefty 30 per cent to Rs202.84 billion. The utilisation on actual releases of Rs138 billion has been calculated to be just above 62 per cent.

The progress report shows a significant reduction of just below 26 per cent to Rs67.25 billion from actual estimates of Rs90.79 billion in spending on social sector – education, health-care, regional planning, social protection, etc. Allocation for infrastructure – roads, irrigation, energy, etc –development has been raised by over 10 per cent to Rs99.50 billion from actual budgeted amount of Rs90.7 billion.

The provincial development is primarily financed through surplus accruing from the revenue and capital accounts of the provincial government and foreign assistance.

The government had spent Rs166.86 billion on development during the last financial year.

The P&DD officials say the size of the current year’s development programme had again be restored to its original level of Rs260 billion. “We were hoping to receive some additional money from the federal government to fill the shortfall. Since that money is not coming, the province has decided to keep its part of the development programme more or less intact and we plan to surpass the average utilisation level of the previous years,” the official said.