With the exception of Punjab, the federal and provincial governments have agreed in a meeting of National Economic Council (NEC) to allocate only 2 percent of their development budget for new development schemes in the next financial year staring from July 1, 2012, sources disclosed on Tuesday.
Sources said the remaining 98 percent would be allocated to complete the ongoing projects, as emphasis would be given on the completion of ongoing priority projects. “New unapproved projects would be discouraged in the next fiscal year because they may cause a thin spread of resource allocation, resulting in time and cost overrun,” sources said.
During the meeting, the government of Punjab was a staunch opponent to this proposal, while the three remaining provinces – Sindh, Balochistan, and Khyber Pakhtunkhwa – were in its favour. The NEC has already approved an annual plan for the next fiscal year 2012-13 with the total development outlay of Rs 873 billion, which include a budget for Federal Public Sector Development Programme (PSDP) of Rs 360 billion and a provincial development outlay of Rs 513 billion. The meeting also ensured that foreign assistance was not underestimated. In the total proposed PSDP, the size of foreign assistance was estimated at Rs 100 billion.
The NEC approved growth targets of 4.3 percent as envisaged in the Annual Plan 2012-13 under the growth strategy. The targets would be achieved through improvements in productivity and competitiveness‚ reforms in the markets‚ promotion of cities as regional clusters‚ improvements in connectivity‚ and reforms in civil service. The meeting was informed that no reduction in current year’s 2011-12 PSDP size was made to help restore GDP growth.
While reviewing the annual plan for the current year and the proposed annual plan for the next year‚ the NEC was informed that the performance of the economy during the current fiscal year was “satisfactory”. The GDP growth was expected to be 3.7 percent against 3 percent achieved during the last year. The water sector would get an allocation of Rs 44,128 million, defence Rs 4,416 million, the National Highways Authority (NHA) Rs 48,000 million, Atomic Energy Commission Rs 36,915 million, Finance Division Rs 8,627.3 million, Railways Rs 20,867 million, Planning Commission Rs 25,811.3 million, Higher Education Commission (HEC) Rs 14,509 million, Kashmir Affairs Rs 19,973 million, States and Frontier Regions Rs 15,000 million, and for special programmes Rs 27 billion would be allocated in the next financial year.
