ISLAMABAD: The Annual Plan Coordination Committee (APCC) on Saturday finalised Rs800 billion worth of the Public Sector Development Programme (PSDP) to achieve an economic growth rate of 5 per cent in 2022-23.

The PSDP for next year is Rs100bn lesser than the current year’s allocation of Rs900bn, while the economic growth target of 5pc is also slightly lower than the current year’s provisional output estimate of 5.97pc.

The APCC also recommended a Rs2.184 trillion including Rs346bn foreign aid as next year’s consolidated development budget for 2022-23 of the federal and provincial governments. This national development outlay will include the federal PSDP of Rs800bn. The National Economic Council (NEC) to be chaired by Prime Minister Shehbaz Sharif will approve these figures before the budget.

The APCC meeting was chaired by Planning and Development Minister Ahsan Iqbal, who also holds the portfolio of Deputy Chairman Planning Commission.

APCC recommends national development outlay of Rs2.18tr

The targeted 5pc growth for 2022-23 is anchored upon ensuring quality growth without triggering fiscal and external sector imbalances. Both the SBP and the Ministry of Finance endorsed this growth outlook.

Briefing media persons after the meeting, Mr Ahsan said under PSDP federation will receive Rs26bn, Punjab Rs58bn, Sindh Rs62bn, Khyber Pakhtunkhwa Rs48bn, Balochistan Rs112bn, Azad Jammu and Kashmir Rs34bn, Gilgit-Baltistan Rs33bn and erstwhile FATA will receive Rs50bn.

The proposed ratio of allocation for ongoing (171) and new (902) projects is 89:11 which shows that priority has been attached to projects near completion.

He said 90pc of allocations will be made for ongoing projects to bring continuity to the development of the country. He said the government is prioritising underdeveloped areas in next year’s plan.

Mr Ahsan said the government is allocating a funds to solve the issues of water and electricity in Gwadar. He said various schemes for the youth of Balochistan will be launched to bring them on a par with the rest of the country.

The minister said the government is paying special attention to protecting the water resources and work on dams that are under construction will be expedited.

The minister said Higher Education Commission also remains the top priority of the government and its allocations will be protected and increased gradually. He further said that focus is also being made on the information technology and science sectors. He said 250 technical-vocational institutes will be established to impart technical education to the youth.

He further added that the youth would be trained to cope with the challenges of cybersecurity and various schemes would be announced in the upcoming budget for their welfare.

PSDP salient features

The Rs800bn PSDP was approved against the Finance Division’s indicative amount of Rs700bn to maintain the pace of the physical progress of ongoing projects. Under these, projects with 80pc expenditures have been fully financed for completion by June 2023, while 55pc of total allocation has been proposed for the infrastructure sector to attract foreign investment.

Within infrastructure, T&C proposed allocation is Rs227bn or 29pc of the total size, the water sector allocation is Rs83bn or 11pc as per the commitment made under National Water Policy, energy sector’s proposed allocation is Rs84bn or 11pc of the total size, in addition, an amount of Rs84bn will be mobilised as self-finance by Power Division.

Physical Planning & Housing proposed allocation is Rs39bn or 5pc of the total size. The proposed allocation for PP&H is Rs39bn since the construction sector not only assists in creating employment but also contributes to the growth of allied industries. Within social sectors, health and population proposed allocation is Rs23bn and Rs45bn has been proposed for the education sector and Rs60bn is allocated to achieve sustainable development goals and ensure development at the grass-root level.

Moreover, Rs50bn has been allocated for merged districts of Khyber Pakhtunkhwa to bring them on a par with other areas of the country. The proposed outlay for science and IT is Rs25bn and production sectors --industries, food and agriculture is Rs18bn and Rs90bn have been earmarked to make Viability Gap Funding to encourage private sector investment in infrastructure.


The APCC pointed out that over Rs6.3tr throw-forward of projects posed a challenge along with a demand of rupee cover of over Rs250bn of foreign aided projects for PSDP 2022-23.

The other challenges are incursion of provincial nature projects into federal PSDP, implementation of policy guidelines of financing of provincial projects by the federal government approved by the NEC and several other factors.

Finance Division with approval of the Federal Cabinet conveyed a revised size of PSDP 2021-22 from Rs900bn to Rs700bn. Accordingly, the rupee component was rationalised and revised downwards from Rs800n to Rs600bn while following certain guidelines for adjusting the cut of Rs200bn whereas the foreign aid component of Rs100bn was kept intact.

Economic outlook

An official announcement said that the Joint Chief Econo­mistapprised the meeting about developments on economic indicators against targets envisaged in the Annual Plan 2021-22.

During 2021-22 aggregate demand pressures remained strong as reflected through the sale of durables, higher imports of consumables and credit uptick for the private sector. Credit to the private sector reached its highest ever level. This increase in demand was mainly due to good financing terms offered by banks and rising incomes during the period.

The economist highlighted that with the likely resumption of IMF programme, the economic outlook for the next fiscal year 2022-23 is expected to result in an orderly rebalancing between imperatives of economic growth and addressing the external sector vulnerabilities; particularly in the light of the extent of global slowdown and the expected abatement of global inflation in commodity prices and the stability of exchange rate movements.

He further said fiscal adjustment efforts, addressing worsening trade balance, and mitigating political and economic uncertainty will result in a slowdown in economic growth.

Published in Dawn, June 5th, 2022

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