ISLAMABAD: The Annual Plan Coordination Committee (APCC) on Friday finalised Rs900 billion worth of Public Sector Development Programme (PSDP) to achieve an economic growth rate of 4.8 per cent in the next fiscal year (2021-22).
The PSDP for next year is over 38pc higher than the current year’s allocation of Rs650bn, while GDP growth target of 4.8pc is conservatively higher than the current year’s provisional output estimate of 3.94pc.
The APCC meeting was presided over Planning Commission Deputy Chairman Jehanzeb Khan.
Speaking at a press conference, Minister for Planning and Development Asad Umar said the conservative estimate for growth was based on understanding that large-scale manufacturing (LSM) and agriculture had bounced back this year after a decline of two years and would moderate next year.
Minister says provinces expected to put together Rs1tr for their next year’s annual development programmes
He said cotton was the only crop which had been going down in recent years, declining by over two million bales to 7m bales this year and hence a focused attempt would begin at the start of the season with good seed and quality pesticides to recoup its production well above 10.5m bales, including 4m bales in Sindh and 6m bales in Punjab and the rest in other provinces. He said the rising international prices would also help lift cotton production in the country.
The minister said the provinces were expected to put together about Rs1 trillion for their annual development programmes (ADPs) for next year. He said the Public Private Partnership Authority (P3A) of the federal government was expected to start almost Rs1tr worth of development programmes next year through private sector investments through Rs70bn funds it would be getting from the PSDP.
The minister said that not only the country’s development programme but the entire system had come to a halt because of the National Accountability Bureau (NAB) factor. He said the government had tried through a new draft law to exempt bureaucrats and businessmen from NAB’s jurisdiction to facilitate investments, while the politicians kept fighting.
Mr Umar said the draft law could not sail through the approval process and he had asked the prime minister to get the bill passed, if not with majority in the Senate, then through the joint sitting of parliament.
Responding to question, the minister said most of the demands of the provinces for PSDP shares had been met and could be further discussed with the prime minister at a meeting of the National Economic Council (NEC) next week by the provincial chief ministers, but the provinces had unlimited desires and these had to been addressed within the available resources.
He said the next year’s growth target of 4.8pc would be driven by 3.4pc growth in agriculture, 6.8pc in industry, 6.2pc in manufacturing and 4.7pc in the services sector. He said the key objective of the PSDP this year was to achieve equitable and balanced development and combat the adverse impact of the ongoing Covid-19 pandemic.
He said poultry production would also normalise next year, while electricity consumption was projected to increase by 6pc on the back of industrial incentive package. Gas and coal production would also be drivers of growth, while construction would continue to grow next year, he added.
The minister said that about 25pc of the total PSDP allocation was for new projects and the remaining for completion of the existing schemes. Even the new projects included in the PSDP would have shorter gestation period for completion within the next two years.
The APCC decided to allocate sufficient funds for the projects which are likely to be completed by June 2023 and high impact employment generating projects based on sectoral and regional balance. The meeting recommended to the NEC a policy for financing of provincial projects.
The Rs900bn PSDP involves foreign aid of Rs101bn. The ministries and divisions, provincial governments and Azad Jammu and Kashmir and Gilgit-Baltistan had forwarded total demands worth Rs1.5tr for next year and about Rs600bn worth of projects had to be dropped.
Projects with 80pc expenditure have been fully financed for completion by June 2022. About 57pc (Rs509bn) of total allocation has been proposed for the infrastructure sector. Within infrastructure, transport and communication would get an allocation of Rs265bn (29pc) and water sector Rs99.4bn (11pc) as required under the National Water Policy. The energy sector would get Rs103bn (11pc) and physical planning & housing Rs41bn (5pc).
An amount of Rs133bn has been allocated for Regional Equalisation Programme, including Rs54bn for merged districts of Fata, Rs45bn for AJK and GB and Rs34bn for less developed areas under north and south Balochistan packages and Sindh and GB development package. The construction sector will get Rs41bn.
The social sector has been given Rs170bn, including Rs28bn for health and Rs42bn for education. An amount of Rs14bn has been earmarked for Prime Minister’s Ten Billion Tsunami Programme and Rs74bn for Sustainable Development Goals.
An amount of Rs62bn has been earmarked to make Viability Gap Funding to encourage private sector investment in infrastructure.
Asad Umar said targeted growth from now onwards of the remaining period of the current government would be anchored upon ensuring quality growth without triggering fiscal and external sector imbalances and to maintain single digit inflation.
Published in Dawn, May 29th, 2021