NEC approves Rs1.3tr development budget

NEC approved federal PSDP at Rs525 billion while the four provinces’ development budget estimated at Rs650 billion.

ISLAMABAD: The National Economic Council (NEC) on Thursday approved a Rs1.31 trillion national development programme for the new fiscal year and gave the planning and development minister the powers to approve up to Rs3 billion worth of new projects.

Prime Minister Nawaz Sharif who chaired the NEC meeting also authorised the launch of 303 new schemes at a cost of Rs1.6 trillion. More than Rs100 billion have been allocated for these schemes for the next fiscal year. The amount will mainly be spent on projects which will be initiated under the Pak-China Economic Corridor.

The NEC enhanced the Central Development Working Party’s (CDWP) powers to approve development schemes costing up to Rs3 billion from Rs1 billion. The planning ministry had sought powers to approve up to Rs10 billion worth of projects without referring the cases to NEC’s executive committee.

CDWP is headed by the planning minister and currently enjoys authority to approve up to Rs1 billion schemes.

Of the Rs1.31 trillion that NEC approved for next year’s development spending, Rs1.175 trillion will be spent from the national kitty. The remaining Rs135 billion will be arranged by corporations from their own resources.



NEC approved the federal public sector development programme (PSDP) at Rs525 billion while the four provinces’ development budget was estimated at Rs650 billion. The total national development budget was Rs1.155 trillion in the outgoing fiscal year, ending on June 30.

One-fifth of the federal Rs525 billion will be financed by borrowing Rs102 billion from foreign sources. The approved PSDP is Rs15 billion less than the original budget of this year but significantly higher than the anticipated spending of Rs350 billion in the outgoing fiscal.

Similarly, another Rs650 were approved for the annual development plans of the provinces, up by Rs35 billion over original budget of the outgoing year.

The power sector has been given top priority with the highest allocation of Rs260 billion out of the total federal PSDP. The generation sector has been given a lion’s share of Rs155 billion. The sector will get another Rs105 billion from the federal budget for improvement and expansion of transmission lines. The transport and communication sector will get Rs163 billion, including Rs113.5 billion for the National Highway Authority.

The federal government has also earmarked Rs36 billion for bringing an end to disparities in development among the provinces. Punjab will not receive any funds out of the allocation, however a major chunk of Rs15 billion will go to Balochistan. An amount of Rs8 billion will go to Sindh, Rs4 billion to Khyber-Pakthunkhwa (K-P), Rs4 billion to Fata, Rs3 billion to AJK and Rs2 billion to Gilgit-Baltistan under special development package.

Around Rs12.5 billion have been approved for the next fiscal year to achieve millennium development goals. A sum of Rs27.7 billion has been set aside for meeting deficiencies in under-funded projects in the next fiscal year.

A sum of Rs39.4 billion has also been given to Pakistan Railways for building infrastructure to transport coal from Sindh to the rest of the country.

The Higher Education Commission will receive Rs19.3 billion which is higher than this year’s allocation. NEC also approved the framework for eleventh five-year plan within the perspective of the Vision-2025 – a document that aims to make the country one of the largest 25 economies of the world.

However, the framework quickly adds the conditions without which none of the goals can be achieved even eleven years down the line.

The enablers to achieving the goals are political stability, security, rule of law and social justice, according the Vision 2025, prepared by Planning Commission.

“For constructing strong foundations of seven pillars to be drivers of growth, the key enablers must be met,” the framework said. These are developing human and social capital, achieving sustained, indigenous and inclusive growth, reforming and modernising public sector, providing energy, water and food security, fostering private-sector led growth and entrepreneurship, developing a competitive knowledge economy and modernising transport infrastructure.

Published in The Express Tribune, May 30^th, 2014.