The Annual Development Plan prepared by the government for the next fiscal year envisages 4.3% GDP growth rate with contributions from agriculture, manufacturing and services of 4.1%, 4.4% and 4.6%, respectively.
The ADP released on Friday has forecast investment to improve from 12.5% of the GDP to 13.1% with fixed investment to increase to 11.5% from present 10.9% while national savings are expected to rise to 11.2% in next fiscal from previous 10.8%. The government will expedite ongoing restructuring work to make an impact on budget 2012-13 and un-targeted subsidies will be phased out on fast track.
The size of national outlay is Rs 873 billion (3.7% of GDP) higher by 19.6% than the budget allocation of Rs 873 billion of last year. Out of national development outlay, federal program is Rs 360 billion inclusive of ERRA. The provincial program is Rs 513 billion. In the federal PSDP, highest allocation is provided to energy sector (Rs 184 billion), followed by roads (Rs 59 billion) and water (Rs 48 billion).
The government will release more resources for the private sector by lowering its financial needs. The SBP Amendment Act of 2012 and a fiscal adjustment to lower fiscal deficit will help to limit financing needs of the government.
The target of CPI inflation is set at 9.5% for 2012-13 against expected inflation of 11% for 2011-12. The government’s efforts for fiscal stringency, rational monetary policy and vigilance on supply constraints are some of the underlying assumptions for this inflation forecast.
Under the sectoral programs, an amount of Rs 15 billion has been allocated in PSDP for the projects of higher education with focusing on new projects like Benazir Bhutto Medical University Larkana, Abdul Wali Khan University Peshawar, University of Gujrat, National Textile University Faisalabad, University at Swat, National defence University Islamabad, Pakistan Institute of Fashion and Design Lahore and Peoples University of Medical and Health Sciences for Women Nawabshah (Shaheed Benazirabad).
Moreover an amount of Rs 2.9 million has been allocated for the projects of Ministry of Science and Technology while funds worth Rs 2.9 billion have been allocated to five projects of Ministry of Professional and Technical Training.
An allocation of Rs 409 million for 2012-13 has been made for various research organizations attached to Ministry of National Food Security and Research while an amount of Rs two billion has been allocated to manufacturing sector including Rs 806 million, Rs one billion and Rs 145 million for the Ministries of Industries, Production and Textile respectively. Apart from ongoing projects of geological and geophysical mapping exercise, focus would be on putting in use the vast coal reserves in the country for gasification and power production. The ADP envisages to enhancing the present 23,718 MW power production capacity to 24,822 MW by the end of June next year. An allocation of Rs 192 billion has been made for the energy sector for 2012-13 against the expected utilization of Rs 147 billion. Furthermore, Rs 38.2 billion has been earmarked for irrigation projects like small, medium and check dams with Rs three billion for lining of canals while an amount of Rs 150 million has been allocated for capacity building of environment and climate related institutions. Pro-poor budgetary expenditures are expected to increase to Rs 1615 billion; 8% of GDP; allocation of Rs 4.4 billion has been made in federal PSDP for expansion and development of basic and college education in provinces, Rs 14.3 billion have been allocated for preventive and curative programs in the health sector.
