- Rs 800b earmarked for PSDP while Rs 875b have been allocated for ADP
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Meeting approves ambitious GDP growth target of 5.7 per cent
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Prime Minister Nawaz Sharif says Pakistan would have achieved previous year’s GDP target if it had not missed on agricultural sector goals
The federal cabinet on Monday gave its ascent to the federal budget for Financial Year 2016-17 with a total outlay of over Rs 4.5 trillion, which is expected to increase with the introduction of new proposals suggested by the prime minister during the meeting.
Earlier in the day, the National Economic Council (NEC) approved Rs 1.675 trillion development outlay which includes Rs 800 billion for the Public Sector Development Programme (PSDP) while Rs 875 billion have been earmarked for Provincial Annual Development Programme (ADP).
Prime Minister Nawaz Sharif chaired both the meetings through a video-link from the London High Commission – a measure criticised by Imran Khan who said there was a threat of foreign spying if Prime Minister Sharif addressed the meeting via an unsafe video link. However, the premier later in the day rejected the criticism, saying that the critics should understand the situation before making any argument.
Budget Outlay:
Despite repeated attempts, no federal minister agreed to discuss the proceedings of the cabinet meeting, suggesting strict directions against media interaction.
However, a well placed source told Pakistan Today, requesting not to be named, that the proposed budget has an ambitious revenue target of Rs 3.62 trillion while the budget deficit has been eyed at 3.8 per cent. The source said that the government has proposed four per cent increase in the expenditure for the next financial year.
The source said that Rs 1.354 trillion have been earmarked for debt servicing while Rs 860 billion have been allocated for Ministry of Defence. The source `added that Rs 169 billion have been earmarked in the budget for subsidy. Besides, Rs 245 billion have been fixed for pension payment.
The source said that the Finance Ministry has proposed seven per cent increase in the wages of the federal government employees but Prime Minister Nawaz Sharif has advised the finance minister to review the increase and see if it could be increased to 10 per cent.
The source added that the federal government has also earmarked Rs 160 billion in the name of development funds other than the public service development projects (PSDP).
“There is no mention for which development purpose these funds would be used,” the source said.
The meeting approved an ambitious GDP growth target of 5.7 per cent for Financial Year 2016-17. Growth target for 2016-17 has been set at 3.5 per cent for the agriculture sector while 7.7 per cent growth has been projected for the industrial sector. The target of 5.7 per cent growth has been fixed for the services sector.
The meeting was informed that significant attention has been given to infrastructure development as it remained neglected during the past 15 years.
Earlier, the Executive Committee of the National Economic Council (ECNEC) approved macroeconomic framework for Annual Plan for 2016-17.
The meeting was given an overview of the state of the country’s economy in 2015-16. The meeting was briefed on the progress report of the Central Development Working Party (CDWP) as well as schemes approved by ECNEC and CDWP from April 2015 to March 2016.
The chief ministers of the four provinces, Khyber Pakhtunkhwa governor and ministers for finance, planning and water and power were present in the Prime Minister’s Office. Provincial finance ministers and secretaries for ministries for finance and planning attended the meeting along with other senior government officials.
While approving all the agenda items of the meeting, the prime minister noted with satisfaction that the GDP in the current financial year remained 4.7 per cent, which was the highest in eight years. Referring to China-Pakistan Economic Corridor (CPEC), Sharif said that the multi-billion-dollar corridor had the capacity to further contribute to the country’s GDP.
PM Nawaz applauded the Minister of Planning, Development and Reforms Ahsan Iqbal and his team for preparing a development plan in line with the economic growth.
At the start of the meeting, chief ministers of Sindh, Balochistan and Khyber Pakhtunkhwa, Khwaja Asif, Ahsan Iqbal and Zafar Iqbal Jhagra in their interaction with the prime minister conveyed their wishes for his speedy recovery.
Following the NEC meeting, PM Nawaz presided over the meeting of his cabinet and approved budget proposals.
During the cabinet meeting, Premier Nawaz appreciated Finance Minister Ishaq Dar for efficiently handling other issues of government affairs besides looking after financial matters of the country. He also lauded good work of the entire team of the Finance Ministry.
The prime minister asked the finance minister to announce a special package for farmers and give substantial subsidy on urea.
PM HOPEFUL:
Later, talking to reporters outside the Pakistan High Commission, Nawaz said Pakistan would have achieved the previous year’s GDP target if it had not missed on goals in the agricultural sector.
He expressed hope that the economic situation would improve this year due to his government’s policies.
“The CPEC will have far reaching effects including consolidation of the economic outlook of the country in years ahead,” said the premier.
He said Pakistan’s future was bright and rapid economic progress will help lay foundations stone for further stability.
To a question, Nawaz Sharif said he was not out of country on his own will, rather he had come abroad for medical treatment.
The prime minister referred to the chairing of NEC and federal cabinet meetings through video link and said in the prevailing circumstances, it was the best possible way that he adopted and it should be acceptable to all.
When asked if the secrecy of budget proposals or related information can be ensured by using the video-link method for such meetings, Nawaz Sharif said these were just proposals and not any secret.
“Budget proposals often become headlines in newspapers one day before these are presented in the cabinet or parliament. This is common in Pakistan,” he said in a lighter vein.
The premier is set to undergo an open heart surgery in London on Tuesday (today) and is likely to remain hospitalised for a week after the procedure.
The prime minister left for London on May 22 for a medical checkup but postponed his return back home following advice by doctors to undergo the surgery.
Reports suggested that during the PM’s absence, Finance Minister Ishaq Dar and Interior Minister Chaudhry Nisar will run the affairs of the country.
Apart from the budget, the country is facing heightened political situation in the aftermath of Panama Papers leaks, with demands from the opposition parties to probe the premier’s offshore wealth.
