NEC okays Rs 730b for development

Setting the gross domestic product (GDP) growth rate at 4.2 percent, the National Economic Council (NEC) on Saturday approved an allocation of Rs 730 billion for development projects and gave a go ahead to the implementation of the reforms laden New Economic Growth Framework from the next fiscal year. Prime Minister Yousaf Raza Gilani chaired the NEC meeting which was attended by the provincial heads of the governments, however, Punjab Chief Minister Shahbaz Sharif was represented by Senior Minister Sardar Zulfiqar Khosa. Addressing a press conference after the meeting, Finance Minister Abdul Hafeez Shaikh said the meeting decided to enhance the federal government’s Public Sector Development Programme (PSDP) for the next fiscal year to Rs 300 billion, up from the Annual Plan Coordination Committee’s approved limit of Rs 280 billion.
The overall infrastructure projects would get Rs 155 billion, social sectors Rs 122 billion and others Rs 23 billion. The meeting also approved provincial development programmes to the tune of Rs 430 billion for the next fiscal year. Punjab would be getting Rs 200 billion, Sindh Rs 130 billion, Khyber Pakhtunkhwa Rs 80 billion and Balochistan Rs 30 billion. The development spending in the next fiscal year would be 58 percent more than the current fiscal year’s spending of Rs 462 billion, he said. Sharing the details of spending priority, he said about Rs 266 billion would be spent on projects near completion, internationally-funded projects, projects in less-developed areas and other important national projects, like Diamer Bhasha Dam. The NEC also approved the new growth framework, which envisages reducing the government’s role to policy making and regulation and creating cities as the engines of economic growth.
The stabilisation programme would continue with a focus on economic growth and job creation, Shaikh said. Planning Commission Deputy Chairman Dr Nadeemul Haq said the country needed a GDP growth rate of 8 percent per annum for the next 20 years for economic growth and job creation. He said even after abolishing 700 development projects, the throw forward for continuing programmes was over Rs 2.6 trillion. He said the development spending in the next fiscal year would be better than the current year’s, which was one of the most difficult years in the country’s history. He said average inflation would remain around 12 percent in the next fiscal year.
Talking to all four provincial chief ministers, except Shahbaz, and other senior officers prior to the NEC meeting, Prime Minister Gilani stressed on the need for close coordination between the federation and provinces for optimal use of financial resources, saying the reforms process should not be limited to the Centre but also be carried out in the provinces to enhance their capacity. Gilani said after the passage of the 18th Amendment and the NFC Award, most of the development work had become the responsibility of the provincial governments. He said the federal government was giving special attention to uplift schemes in terror-affected areas of FATA and the rehabilitation and reconstruction in the flood-hit regions. Gilani said Rs 100 billion of last year’s PSDP were diverted to meet the expenditure for the rehabilitation and reconstruction in flood- and terror-hit areas.