Rs1.7t development budget proposed for upcoming fiscal

Annual Plan Coordination Committee meeting sets growth target of 5.7 per cent for 2016-17

ISLAMABAD: Amid annoyance and uneasiness expressed by ministries, as well as a protest by the Balochistan chief minister, the Annual Plan Coordination Committee (APCC) on Friday recommended a national development outlay of Rs1.675 trillion and set an economic growth target of 5.7% for the new fiscal year.

During the APCC meeting held amidst high drama, Planning Minister Ahsan Iqbal, the chairman of the committee, was unsuccessful in convincing the ministries and provinces to accept the
ground reality of tight fiscal space.



“It was nightmarish challenge to adjust Rs1.8 trillion demands by ministries and provinces within finance ministry’s given envelope of just Rs655 billion,” said Iqbal while speaking to the media after the meeting.

During the consultative process, various ministries and departments demanded Rs1.8 trillion under the federal Public Sector Development Programme (PSDP). Iqbal said the planning ministry had demanded over Rs900 billion but the finance ministry gave only Rs655 billion.

He said that the APPC recommended Rs800 billion for federal PSDP out of which Rs655 billion were allocated to the planning ministry for distribution among ministries and special areas. The remaining Rs145 billion are for temporarily displaced persons (Rs100 billion), parliamentarians’ schemes (Rs20 billion) and Rs25 billion for Gas Infrastructure Development Fund (GIDF).

Another Rs875 billion were proposed for annual development plans of the provinces. The APCC’s recommendations will now go to the National Economic Council, which is headed by Prime Minister Nawaz Sharif.



However, uncertainty remains whether the NEC will meet on the scheduled date of May 30, as the premier may extend his stay in UK, which may also delay presentation of the national budget, so far scheduled for June 3.

The APCC, which is the second last forum for approving new development budget and national macroeconomic plan, also approved 5.7% economic growth rate target for new fiscal year 2016-17 after the finance ministry reconciled itself to ‘ground realities’. The ministry wanted a 6.2% growth target and the downward revised target will affect its next year’s proposed budget deficit target of 3.8% of the Gross Domestic Product.

The finance ministry’s convergence with 5.7% growth rate offers a chance to the Planning Commission to perform its statutory role of economic planning, which has so far been over shadowed by the finance ministry.

During the meeting, Balochistan Chief Minister Sanaullah Zehri staged a boycott over the scaling back of his province’s development budget and the withholding of funds. However, later on, Ahsan Iqbal went to Balochistan House to address Zehri’s grievances.



The provincial government has complained about slicing allocations of the federally funded projects. Against an allocation of Rs48 billion for the outgoing fiscal year, the federal government has so far released only Rs24 billion, which is just 52% of the allocation, said a senior official of the provincial government. He said that for the new fiscal year, the federal government was proposing just Rs46 billion.

However, Iqbal said that the federal PSDP cannot be distributed on geographical lines. He said that after the 18th amendment, the provinces got a major share in the federal divisible pool.

Khyber-Pakhtunkhwa Finance Minister Muzzafar Said also complained about his province being ignored in the new development budget. While talking to the media, he said that the federal government has not allocated funds for new schemes. He said that against Rs78 billion share of the federal government in Chashma Right Bank Canal project, the federal government has allocated only Rs100 million.

The K-P finance minister said that the Planning Minister has assured to include two road projects of the province in the federal PSDP, which are related to China Pakistan Economic Corridor (CPEC).

Ahsan Iqbal said that the APCC has approved 5.7% growth rate for the next fiscal year. He also said that the CPEC projects will be launched with full momentum in the next fiscal year, which will also provide stimulus to economic growth.

However, the National Highway Authority (NHA), which is executing road projects of the CPEC was not happy with its total allocation of Rs190 billion. Out of which, the NHA’s CPEC allocation was just Rs110 billion. The NHA demanded over Rs200 billion alone for CPEC infrastructure projects.

So was the case with Pakistan Atomic Energy Commission (PAEC). Its next fiscal year’s proposed allocation of Rs27.6 billion is almost 10% less than outgoing fiscal year budget. The PAEC’s main energy projects are so far underfunded, said an official.

Published in The Express Tribune, May 28^th, 2016.