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December 24, 2018

Planning Commission bypassed while devising 3-year economic plan


December 24, 2018

ISLAMABAD: Contrary to the mandate of economic planning in accordance with defined rules of business, the PTI-led government has completely bypassed the Planning Commission for devising three-year programme for Pakistan’s economic stabilisation and growth framework which was already submitted to the IMF for securing $10 to $12 billion package.

The economic planning is the mandate of the Planning Commission (PC) under the Rules of Business for running the affairs of the government, but the practice of ignoring the PC in important decision making for policy formulation continues unabated even during the tenure of the PTI-led regime as it was continuously being done in the last several years under the dispensation of both the military and democratic regimes.

“We have not been consulted on any economic stabilisation and growth framework by anyone before submitting the same to the IMF,” top official sources in the Planning Commission confirmed to The News here on Friday.

When contacted, the Finance Ministry official Spokesman, Dr Khaqan Najeeb, replied that all stakeholders were consulted for devising this three-year strategy.

However, sources in the Planning Commission insisted that the PC had become redundant in policy formulation on economic front and the Ministry of Finance continued to sit on driving seat.

Under three-year plan titled 'Pakistan Economic Stabilisation and Growth Framework' envisages slashing the budget deficit from 6.6 percent of the GDP in last fiscal to 4 percent and cutting down the current account deficit by 50 percent bringing it down from $18 billion to $9 billion under three-year programme of the IMF.

The fiscal adjustments of 2.6 percent of the GDP will translate into Rs1,000 billion as the government will have to either generate additional revenues or cut down the expenditure to bring the deficit at desired level of 4 percent of the GDP. The GDP growth target has been envisaged at 4 percent of the GDP. The CPI based inflation is expected to go up close to 9 percent. The government prepared and shared its framework to bring down borrowing from State Bank of Pakistan (SBP) which had climbed to Rs5.5 trillion.

“The PC has become project approving body having no role in policy formulation on macroeconomic front,” said the sources and added that the PC in totality, and, especially the economist group, had virtually lost its importance over certain period.

The post of chief economist has been falling vacant at the moment into the fold of Planning Commission. Ijaz Wasti, belonging to the economist group, has been promoted into Grade 22, and, now summary is moved before Prime Minister Imran Khan for appointing him as chief economist of the country. Earlier, Mr Wasti was serving as economic adviser to the Ministry of Finance, and, now, he was already relieved from its post after his promotion into Grade 22.

After removal of Dr Pervez Tahir during the tenure of Musharaf-Aziz regime in 2005-6, the PC could not manage to get any powerful chief economist in its fold in last 13 years because mostly outsiders were brought on this post and on the name of restructuring the position of chief economist was put on weak grounds. The economist group was also ignored by all governments in the past on the ground that no one was competent enough to clinch this important position.

Now with the promotion of Mr Wasti into Grade 22, the economist group (EG) is going to get its position of chief economist after lapse of several years. Now the EG as whole will have to perform to make itself relevant; otherwise, the Ministry of Finance will continue expanding its role in both policy formulation on economic planning as well as execution of these devised policies in months and years to come under the scrutiny of IMF programme.

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