ISLAMABAD, May 21: The annual plan coordination committee (APCC) which met here on Monday did not discuss next year’s annual plan, but held partial discussions on a Rs514 billion Public Sector Development Programme (PSDP) proposed by the Planning Commission for 2007-08.

Presided over by the deputy chairman of Planning Commission, Dr Akram Sheikh, the meeting was attended by the provincial representatives and senior officials of federal ministries.

The committee will meet again on Tuesday to firm up recommendations on next year’s development budget to the National Economic Council (NEC) for approval.

NEC is the highest economic decision-making body, comprising top federal and provincial leadership.

The deputy chairman told reporters after the first day of deliberations that the next year’s PSDP would be consolidated on Tuesday and then recommended to the NEC for approval.

He said the NEC would meet on May 31, to be headed by the prime minister and attended by all the provinces.

He confirmed that the NEC did not discuss macroeconomic forecasts for the next year.

Traditionally, the APCC is required to review current year’s annual plan and set macroeconomic targets for the next year. The economic growth rate this year would be slightly higher than seven per cent, and the size of the economy would grow to $150 billion while per capita income would be around $950, he said. He said growth this year was broad-based and agriculture output achieved a growth rate of five per cent on account of better wheat, sugarcane, and livestock production.

Large-scale manufacturing, he said, would also grow in double digits besides a robust growth in the services sector.

The meeting, informed sources said, finalised a Rs50 billion allocation for water and power projects, including for land acquisition for Bhasha and Akhori dams.

The water and power sector allocations for next year are about Rs10 billion higher than Rs39 billion of the current year.

The APCC also discussed a Rs29 billion share for Balochistan in federal development budget for next year, but the provincial authorities protested that it was significantly lower than current year’s share of Rs36 billion and demanded higher allocations for next year.

Informed sources said there was difference of opinion among provinces and the federal government over water sector projects and flood protection programmes. Hence, the APCC directed the stakeholders to meet separately and come up with provincial shares on Tuesday.

The overall allocation for this sector would, however, remain within Rs50 billion.

These sources said some of the participants criticised the ministry of water and power for slow utilisation of funds for the water sector projects and proposed that water sector allocations should not be increased until implementation capacity of the executing agencies was improved.

The Planning Commission tabled a working paper before the APCC that among other things protested over Rs420 billion PSDP size proposed by the ministry of finance and said it was even lower than the current year and was not sufficient to complete even the ongoing projects, leaving no room for new development schemes.The Planning Commission was of the view that the PSDP size of Rs420 billion was about four per cent of the GDP that ‘is far less than the projected PSDP size on current prices at Rs479 billion or 4.7 per cent of estimated GDP 2007-08.”

“The federal allocation proposed by the priorities committee cannot meet the funding requirement of the ongoing projects and leaves no space to undertake new initiatives,” the working paper said.

Therefore, the planning commission proposed that federal share in the next year’s PSDP should be at least Rs329 billion or 22 per cent more than the current year and provincial share should be Rs150 billion or 30 per cent higher than current year. In addition to that, it also proposed to allocate another Rs35 billion for Khushal Pakistan Programme to help reduce poverty. As such, the total PSDP for next year was proposed at Rs514 billion, which is likely to go up further when recommendations of the president and the prime minister are also considered at the NEC level.

The meeting was informed that the executing agencies had demanded a total of Rs578 billion for the federal projects but the finance ministry recommended only Rs270 billion. The planning commission, however, estimated the requirement at Rs361 billion for the federal projects.

The infrastructure development sector is likely to get the highest share of Rs133 billion next year, followed by social and poverty-related expenditure at Rs130 billion, 50 billion for water resources, Rs40 billion for transport and communications and Rs32 billion for energy sector.