PHOTO: APP
For 2016-17, Rs800 billion were set for the federal Public Sector Development Programme (PSDP) and another Rs875 billion for the provincial development programmes.
The National Economic Council (NEC) meeting, where the chief ministers of all four provinces and Gilgit-Baltistan were also present, was chaired by Prime Minister Nawaz Sharif through a video link from London hours before his planned open-heart surgery.
Rs1.67tr budget approved for fiscal year 2016-17
The NEC also set 5.7% growth rate target for the new fiscal year, to be pulled off mainly by the industrial and services sectors. The investment to Gross Domestic Product (GDP) target was set at 17.7% while national savings were targeted to be increased to 16.2% of the total size of the economy. The inflation target was set at 6% for new fiscal year.
Like the past three budgets of the PML-N government, infrastructure remains the priority for the upcoming fiscal year as well. As much as 71.2% of the actual federal development allocation would go to infrastructure projects. Only 13.8% have been earmarked for the social sector.
“The China-Pakistan Economic Corridor has the capacity for further contributing to the GDP and will have far-reaching effects in consolidating the economic outlook of the country in years ahead,” PM Nawaz commented while chairing the meeting.
Scepticism remains, however, if the federal and provincial governments will be able to spend the entire amounts like many previous years. Of the Rs1.514 trillion development budget approved for the outgoing fiscal, the actual spending would stand at Rs1.401 trillion by the year-end, the meeting was told.
Wapda, PEPCO and NTDC will spend Rs253 billion from their own resources, which is apart from the Rs1.675 trillion budget. International lenders will provide Rs229.3 billion in fresh loans to finance Pakistan’s national development budget, which is about 14% of the approved outlay.
Cabinet green-lights Rs4.42tr deficit budget
Out of the Rs800 billion, the actual federal development spending will be Rs657 billion while the rest of the amount would go to the security establishment (Rs100 billion) and PM’s youth package. The federal PSDP for 2016-17 is Rs75 billion or 13% higher than the outgoing year’s development budget of Rs580 billion.
The proposed federal development budget is aimed at providing impetus to growth that has remained subdued in the first three years of the PML-N government. The federal government approved Rs467 billion for infrastructure projects – 14.4% higher than this year.
Within infrastructure, Rs157 billion have been proposed for the power sector; Rs260 billion for transport and communications; Rs32 billion for water; and Rs18 billion for physical planning and housing.
The National Highway Authority will get a share of Rs188 billion, mainly to complete the road projects of the CPEC. The allocation, however, remains far below the requirements, officials say.
Among the main CPEC projects funded are Burhan-Hakla to DI Khan Road of the western corridor, Thakot-Havelian Road, Multan-Sukher on the eastern route, Eastbay Expressway of Gwadar and New Gwadar International Airport.
FATA forum
For the Federally Administered Tribal Areas (Fata), the NEC approved setting up a special forum under the Peshawar corps commander, who will be allowed to endorse development schemes worth up to Rs1.5 billion, buy land for them and monitor their execution.
The panel members will include the military’s engineer-in-chief, Frontier Works Organisation director-general, 45 Engineers Division and Resident Formation’s General Officers Commanding, the Fata additional chief secretary, the Fata Planning & Development Secretariat secretary and representatives of federal finance and planning ministries.
The NEC also gave its nod to set up a National Steering Committee for coordination on sustainable development goals between the Centre and provinces.
Published in The Express Tribune, May 31st, 2016.
COMMENTS (1)
Comments are moderated and generally will be posted if they are on-topic and not abusive.
For more information, please see our Comments FAQ