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Govt committee recommends Rs1,837 bn development outlay for next fiscal


May 24, 2019

ISLAMABAD: Amid protest by Sindh over slashing down its share and exclusion of 36 schemes, the Annual Plan Coordination Committee (APCC) on Thursday recommended national development outlay of Rs1,837 billion to National Economic Council (NEC) for next budget 2019-20. It also approved macroeconomic framework with GDP growth target of 4 percent and rising inflation on average at 8.5 percent for next budget.

Despite issuing notification for termination of contract of Asif Sheikh Adviser Development Budget in the aftermath of Islamabad High Court (IHC) decision for declaring his appointment illegal, he continued to extend briefing on development budget during the proceedings of the APCC meeting held here on Thursday under the Chairmanship of Minister for Planning Makhdum Khusro Bakhtyar that raised many eyebrows. Sindh’s Minister Shahbeer Bijrani told reporters outside P Block that their province share was cut down as they were providing Rs37 billion projects into PSDP. “The center has exclude 36 development projects,” he said and added that with such reduction how far flung areas of the province would be developed.

The APCC cleared reduction in federal development programme by 15.6 percent to Rs675 billion for upcoming budget 2019-20 against original allocation of Rs800 billion for Public Sector Development Programme (PSDP) for last fiscal 2018-19 under the PML-N led regime. After coming into power by the PTI led regime, the PSDP was revised downward to Rs675 billion for outgoing fiscal year. According to latest estimates, the utilization of federal PSDP is estimated to touch Rs580 billion till end June 2019.

“The APCC has approved national development outlay of Rs1837 billion including Rs675 billion as federal PSDP and Rs250 billion in shape of public private partnership (PPP) mode. The provincial development outlay for next budget is estimated at Rs912 billion,” Federal Minister for Planning Makhdum Khusro Bakhtyar told journalists outside P Block (Ministry of Planning) after chairing APCC meeting here on Thursday.

When the federal minister was asked about the protest launched by the Sindh over reduction in its development share, Makhdum Khusro Bakhtyar replied that the PSDP was prepared for approving nationally important development projects and not on the basis of any provinces share. He said that the government approved Islamabad development package with allocation of Rs15 billion for execution of projects in areas of health, education, road infrastructure, water and sanitation.

He said the government approved Rs24 billion for Prime Minister’s SDGs programme for next budget. The bloc allocation of Finance Ministry was slashed down from Rs127 billion in outgoing fiscal to Rs100 billion for the next budget. He said the government gave highest priorities for making funds allocations for Basha, Dasu and Mohamand dams. He said that the power generation was sufficient to meet our demands so now the focus shifted towards investing into transmission lines.

He said the government would make innovative funding of Rs250 billion in shape of PPP mode operational and conceded that they could not utilise a penny out of PPP mode in outgoing fiscal year. “We are going to utilise $2 billion for construction of Sukkur-Hyderabad motorway on BOT basis under CPEC,” he said and added that one railway track would also be constructed under PPP mode. He said the government allocated Rs22 billion for Fata development.

According to official announcement, a meeting of the APCC was held on Thursday under the chairmanship of Minister for Planning, Development and Reform Makhdum Khusro Bakhtyar in which provincial finance ministers, federal secretaries, high level officials from provincial and area governments participated.

Speaking on the occasion, Minister for Planning, Development and Reform highlighted the performance of the economy amidst backlog of serious macroeconomic imbalances. He reaffirmed the commitment of the government for balanced and equitable development. He apprised the participants about the challenging adjustment process which is constraining expanding development portfolio. However the government is optimising economic returns by investing in projects with high socio-economic return.

Giving broader outlines of next financial year’s PSDP, Makhdum Khusro said that this will be the incumbent government’s first development portfolio under serious budgetary constraints. Even then new important areas including climate change, clean green Pakistan, knowledge economy, human resource development, agriculture growth, regional equalization development programme will be given priority besides harnessing full socio-economic potential of the CPEC, stated the minister. He said growth strategy of the government is to create more opportunities for the poor and vulnerable and support regional equalization.

The minister highlighted that previous government mismanaged the PSDP (2018-19) in the last year of its term by adding 393 projects with a throw-forward of Rs2 trillion which was 33% of the total throw-forward against a meagre allocation of Rs55 billion.

During the meeting, the Ministry of Planning gave an overview of the performance of the economy in current fiscal year (2018-19) and macro-economic targets for the next fiscal year (2019-20). The participants were informed that the government is making concerted efforts to stabilise the economy to correct structural imbalances and enhance long-term growth potential. The size of the national development outlay is proposed at Rs1.837 trillion with provincial contribution of Rs912 billion. Ministry of Planning also apprised the stakeholders about the underlying priorities of the development framework and presented federal public sector development programme (PSDP) for 2019-20 with an allocation of Rs675 billion. Recognising the critical role of the private sector, Public-Private Partnership, BoT and other modes would be utilised. Initially innovative financing of infrastructure projects with an allocation of Rs250 billion are presented to enhance the role of the private sector through relevant government departments.

Infrastructure continued to be the largest sector but social sector is also given importance according to the government priorities. Special importance will be given to the backward and remote areas especially Balochistan, South Punjab, Rural Sindh and Southern Khyber-Pakhtunkhwa. Projects under CPEC have been provided sufficient resources required for their completion as per schedule.

After giving a broad overview of the development framework, detailed discussion was held with individual ministries. The audience were told that provincial priorities are already reflected in the PSDP through extensive consultative process with the provincial and regional governments.

The meeting decided to formulate a coordination committee under Secretary Planning with representation from all provinces. The proposed committee will make monthly review of ongoing projects, releases and operational difficulties whereas quarterly review will be conducted by the minister.

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