Government more than doubles development spending since 2013

ISLAMABAD: The government increased public sector development spending to Rs800 billion in 2017 from Rs348.27 billion in 2013 while initiating a number of mega infrastructure, power and other projects, which will remain instrumental in attracting private sector’s investment, sources said on Wednesday.

The finance division’s sources said the government takes into consideration the recommendations made by all the stakeholders, including State Bank of Pakistan while formulating economic and financial policies.

They said the government has focused on bringing improvement in real sector growth through agriculture, industrial and services sectors and in this connection a number of public sector development programmes have been initiated in productive and infrastructure sectors.

The sources said the government has successfully curtailed the fiscal deficit to 4.6 percent of GDP in fiscal year 2016 from 5.3 percent in fiscal year 2015 and 5.5 percent in fiscal year 2014 on account of prudent expenditures management and increase in revenue. Fiscal deficit was successfully brought down from 8.2 percent of GDP in fiscal year 2013. 

Moreover, the sources said the National Doing Business Reform Strategy 2016 underpinned the government’s efforts to improve Pakistan’s business climate to attract higher investment inflows. The reforms focus on regulatory changes, improving technology and building capacity of implementing agencies for simplification of procedures involved in making businesses operational.

As a result of successful implementation of key reform measures, Pakistan’s ranking on World Bank’s ease of doing business index 2017 has improved by four points to 144 out of 190 economies. The country has been recognised as one of the top 10 reformers globally in area of business regulation. Similarly, the inflation rate has been kept under control due to effective monetary and fiscal policies.

The price stability, said the sources, maintained the confidence of economic agents to enhance economic activities in the country. The government has focused on improvement in corporate governance, restructuring of public sector enterprises (PSEs) and strategic partnership through privatization under its PSE reform strategy. It has appointed financial advisers for various public sector corporations.

The implementation of national power policy 2013 has resulted in decrease in line losses of distribution companies from 18.7 percent in fiscal year 2014/15 to 17.9 percent during 2015/16 and increase in bill collections from 89.2 percent in 2014/15 to 94.6 percent in 2015/16. In fiscal year 2017, the line losses further declined to 17.2 percent.

Sources said the China Pakistan Economic Corridor is a testament of Pakistan’s potential and the government’s commitment to use this opportunity as a game changer for the country in coming decades. The CPEC projects include investment of $34 billion in the energy sector and $12 billion in building roads, highways, railways ports and airports. Twenty five industrial zones are also being established on three CPEC’s routes.