Ambitious targets

The plan is ambitious given that the 4% growth target is significantly above IMF’s forecast of 2.8%

The National Economic Council (NEC) has approved a national development programme for the upcoming fiscal year which targets an economic growth rate of four per cent and Rs1.837 trillion in development outlay. The programme also adds around 300 federal projects to the portfolio. The NEC meeting also approved the 12^th five-year plan (2018-23) that forecasts 6.5 per cent economic growth rate by 2023 while mostly relying on gains via the second phase of the China-Pakistan Economic Corridor.

The plan is ambitious, to say the least, given that the four per cent growth target is significantly above the International Monetary Fund’s forecast of 2.8 per cent. Government planners are basing the growth forecast on 3.5 per cent growth in the agriculture sector, 2.2 per cent in industry, and 4.8 per cent in the services sector. Even the government itself had to admit that the target was ambitious. Meanwhile, the development outlay includes Rs925 billion in the federal public sector development programme (PSDP) and a combined Rs912 billion in the provincial annual development plans (ADPs). Also worrying is the removal of almost 400 projects, including a programme for a social safety framework, including nutrition. The Planning Commission withdrew it just ahead of the meeting, based on the argument that a new ministry would go through the plan and resubmit it in line with its own goals.

Prime Minister Imran Khan was quoted as telling the meeting that the country was facing an unprecedented economic crisis and coordinated efforts were needed from the federal and provincial governments to overcome the crisis. Unfortunately, his statement was removed just hours from another amnesty scheme and a stock market bailout, both of which remain contentious. The prime minister also asked the provinces to live up to their past commitments to allocate financial resources for the development of the erstwhile Fata. On that note, one of the few honest positives was that Rs100 billion will be administered by the finance ministry for a special development programme for internally displaced persons, most of whom are from Fata, while Rs22 billion have been allocated for merged districts under a 10-year special development plan.

Published in The Express Tribune, June 1^st, 2019.

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