ISLAMABAD: With substantially higher allocations for special regions – AJK, Fata, Gilgit-Baltistan and Balochistan – the National Economic Council on Friday set country’s total development budget for next year at Rs2.140 trillion with focus of investments on roads and energy to boost economic growth rate to six per cent.
Shown signs of popular moves, the prime minister’s two new initiatives worth Rs25 billion were made part of the development plan including Rs12.5bn each for ‘Electricity to All’ and ‘Clean Drinking Water for All’. This was in addition to major focus on non-core PSDP that included Rs30bn for PM’s Global Sustainable Development Goals to be spent through political leaders, Rs40bn Special Federal Development Programme, Rs45bn each for security enhancement and relief and rehabilitation of internally displaced persons.
Presided over by Prime Minister Nawaz Sharif and attended by all the four chief ministers, the prime minister of Azad Kashmir, Chief Executive of GB and Governor of KP representing tribal region, the meeting also approved macroeconomic framework for next year envisaging increase in inflation to 6pc from 4.1pc of this year and total investments to 17.2pc of GDP from current 15.8pc.
Rs25bn water and electricity for all programmes also part of the PSDP
Speaking to journalists after presiding over the meeting, Minister for Planning and Development Ahsan Iqbal said the federal Public Sector Development Programme (PSDP) was approved by the NEC at Rs1.001tr for next year, up 25pc from Rs800bn of the outgoing fiscal year. This would include a foreign financing of Rs166bn.
He said the prime minister pleaded a special case for AJK, Fata and GB and directed that a special formula be designed in the National Finance Corporation (NFC) for allocation of funds for these areas that could not be given the provincial status due to legal complications but were part of Pakistan and their people required to be treated like the people of four provinces.
He then directed the increase in block allocations for AJK to Rs22bn from current year’s allocation of Rs12bn and this was the largest increase in history to speed up the pace of development. Likewise, the block allocation for GB was jacked up from Rs9bn to Rs15bn while Fata’s share was increased to Rs24.5bn from Rs21bn this year.
Likewise, a special amount of Rs17bn was also allocated for Balochistan, Mr Ahsan said, adding that this was on top of federal programmes and was aimed at improving water resources and invest in areas of provincial domain.
The cumulative provincial annual development plans (ADPs) were estimated at Rs1.140tr against Rs875bn of this year, about 27pc higher. This included Punjab’s Rs600bn followed by Sindh at Rs263bn, Khyber Pakhtunkhwa at Rs202bn and Balochistan at Rs75bn.
The minister said another Rs400bn would be spent by corporations like Wapda and NTDC from their own resources that would put the country’s total development outlay well above Rs2.5tr.
Explaining priorities of the development plan, he said infrastructure would be given Rs414bn, including Rs320bn to National Highway Authority, Rs43bn to Railways and Rs44bn for other transportation modes like aviation etc.
A total of Rs404bn would be spent on energy sector including Rs87bn from PSDP and Rs317bn to be raised by Wapda/NTDC. About Rs180bn have been earmarked for other China-Pakistan Economic Corridor (CPEC) projects. Social sector allocation, have also been increased to Rs153bn from Rs90bn.
As such, the core PSDP would be put at Rs866bn next year against Rs655bn of current year while non-core development spending would amount to Rs135bn. A special allocation of Rs27bn has been made for completion of CPEC projects.
Mr Ahsan Iabal said the initiatives taken by the PML-N government had delivered 5.3pc GDP (gross domestic product) growth rate after a gap of a decade – a great achievement for the entire nation that was trapped in 3pc to 3.5pc growth rate four years ago. The increase in growth rate, he claimed, was because of steps taken towards macroeconomic stability, infrastructure development, energy supply and human resource development.
For achieving the 6pc GDP growth rate, the agriculture sector is targeted to maintain its current year growth rate of 3.5pc while important crops would grow by 2pc instead of 4.1pc this year. Manufacturing sector is projected to grow by 6.4pc next year instead of 5pc this year contributed by 6.3pc increase next year compared to 4.9pc this year.
The services sector was also expected to grow by 6.4pc instead of 6pc this year while livestock would slow down to 2pc growth instead of 3.4pc increase this year.
Mr Iqbal said the completion of China-Pakistan Economic Corridor (CPEC) was one of the top objective of the government and hence Rs324bn would be given to the National Highway Authority (NHA).
The minister said export decline was a major challenge for Pakistan because of contraction in leading world markets.
Therefore, allocations had been made for cluster development in agriculture, mining and industry to secure growth in entire supply chain of value addition. Based on this, exports are projected to grow by 6.4pc next year to $23.1bn against decline this year at $21.7bn. At the same time, import growth target has been set at 9.6pc to $50bn instead of $45.7bn this year.
As a result, the next year trade deficit has been estimated at $26.9bn against $24bn this year while current account deficit would increase to $10.4bn compared to $8.3bn this year. As such, current account deficit would amount to 3.1pc of GDP against 2.7pc this year.
He said to promote modern education Rs35bn had been allocated for Higher Education Commission.
He said initiatives like start-up and innovation packages would be launched so that youth could start businesses, while steps like big data cloud computing, cyber security and automation and robotics were being introduced.
Published in Dawn, May 20th, 2017