Government spending under PSDP rises to Rs800 billion

ISLAMABAD: The government, with a focus on increasing the public sector development spending, has ensured raise in this domain, as it increased to Rs800 billion in 2017 from Rs348.27 billion during 2013.

A number of massive infrastructure, power and other projects have been initiated, which will remain instrumental in attracting private sector investment.

Highlighting measures on Saturday, sources in the Finance Division said the government takes into consideration the recommendations and weaknesses made by all the stakeholders, including the State Bank of Pakistan, while formulating economic and financial policies.

The government has focused on bringing improvement in the 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 consolidation efforts are on track since the government has successfully curtailed the fiscal deficit at 4.6 percent of GDP in the fiscal year 2016, 5.3 percent of GDP during the fiscal year 2015 and 5.5 percent in the fiscal year 2014 on account of prudent expenditure management and increase in revenues.

The fiscal deficit was successfully brought down from 8.2 percent of GDP in the fiscal year 2013. Moreover, the sources said the government's efforts to improve Pakistan's business climate to attract higher investment inflows have been underpinned by the National Doing Business Reform Strategy 2016.

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 the World Bank's Ease of Doing Business index has improved four points to 144 out of the 190 economies in Doing Business Report 2017 and the country has been recognised as one of the top 10 reformers globally in the area of business regulation.

Similarly, the inflation rate has been kept under control due to effective monetary and fiscal policies. This price stability maintained the confidence of economic agents to enhance economic activities in the country, the sources added.

Under the PSE Reform Strategy, the government has focused on improvement in corporate governance, restructuring of PSEs and strategic partnership through privatisation.

The government has appointed financial advisers for various public sector corporations. Implementation of the National Power Policy 2013 has resulted in reduction in line losses of power sector distribution companies (from 18.7 percent in the fiscal year 2014/15 to 17.9 percent during the fiscal year 2015/16) and increase in collections (from 89.2 percent in the fiscal year 2014/15 to 94.6 percent in the fiscal year 2015/16).

During the fiscal year 2017, the line losses have declined further to 17.2 percent, they said.

The China-Pakistan Economic Corridor (CPEC) with an investment of $46 billion is a testament of Pakistan's rising potential and the government's commitment to use this opportunity as a game changer in the coming decade.

The sources also said 25 industrial zones are being established on three routes of CPEC.

The CPEC projects include investment of $34 billion in the energy sector and $12 billion in building roads, highways, railways ports and airports.