The mandarins of the economic ministries spent a busy day on Tuesday sorting out strategy to counter the provincial governments hard tactics to seek more funds for their development programmes in all the devolved sectors for the next fiscal year. An official source said that the provincial governments were likely to seek enhancement in their allocation for the provincial programmes from the centre at the meeting of the National Economic Council on May 24.
Usually the Finance Ministry keeps a cushion of Rs 5 billion for the discretion of the Prime Minister but we have information that each provincial government is planning to seek additional Rs 5 to 10 billion for social sectors which primarily fall under their jurisdiction, the source said. To reign in the provinces, the federal government has dropped the proposed plan of Youth Fund, proposed to provide small loans to technical and vocational educated youth to set up their own businesses from the meeting. The plan was dropped as youth affairs falls under provincial governments and centre did not wanted to become hostage to political pressures, the source said adding that even some allocation for social sector was still made under prime minister and president pressure.
The source said the government was convinced to drop the youth fund, as official estimates projected new employments of 100,000 next fiscal year mainly due to the financing of the ongoing social sector and infrastructure projects.
The Annual Plan Coordination Committee (APCC) had finalized a total national development outlay of Rs 825.2 billion, with federal component of Rs 350 billion and provincial share of Rs 475 billion for the next fiscal year 2012-13. The initial estimate of foreign exchange component was Rs 90 billion but has been enhanced to Rs 100 billion due to the latest projections of the Economic Affairs Division.
The source said the federal government was in no position to dole out extra financing to the provinces and it would be strictly opposed at the NEC meeting. Priority will be given to complete on-going projects, as 96 percent or Rs 335 billion have been allocated for ongoing schemes. Only 4 percent allocation is set for new priority projects mainly in the energy and infrastructure sectors.
He said that the number of water sector projects have been increased from 37 projects this fiscal to 45 projects next fiscal and energy sector projects from 55 this fiscal to 86 next fiscal. These projects are mainly for improving power distribution network. Railways is allocated Rs 1.5 billion next fiscal to get new locomotives under an plan of Rs 150 billion for purchasing new locomotives while an allocation of Rs 1.2 billion has been made for a pilot project to introduce mechanized track maintenance. The government estimates a GDP target of 4.3 percent which will be achieved through improvement in productivity and competitiveness, reforms in the markets, promoting cities as regional clusters, improve connectivity, reforming the civil service, institutions and PSEs, harnessing the potential of youth and embarking on result based management.