NEC expected to approve Rs1.9trln development outlay

ISLAMABAD: The National Economic Council (NEC) is expected to meet under the chairmanship of Prime Minister Imran Khan during this week in order to approve macroeconomic framework and development outlay of Rs1.9 trillion for the upcoming budget.

Minister for Planning Asad Umar confirmed to The News on Monday night that the schedule of holding the NEC meeting would be finalized on Tuesday (today). However, the sources said the government was expected to hold NEC meeting within the ongoing week.

Earlier, the planning ministry was making preparation for holding NEC meeting on June 3, 2021 but it might delay for couple of days. The NEC will grant formal approval to GDP growth rate of 5 percent and inflation target of 8 percent.

There is another emerging challenge for the economy as the import bill is projected to go up to $55 billion in next fiscal year because of rising commodity and fuel prices. So, the current account deficit which is in surplus will be converted into deficit from next budget. The export target will be fixed at over $26 billion and remittances over $31 billion.

The NEC will consider approving national development outlay of Rs1.9 trillion including Rs900 billion for federal government and Rs1,000 billion for four provinces.

The federal government will launch special regional equalization program with an allocation of Rs133 billion for the upcoming budget including Rs54 billion for merged districts of FATA into KP, Rs45 billion for Special Areas in AJK and GB and Rs 34 billion for less developed areas (North and South Balochistan packages, Sindh Development Plan and GB plan.

The size of PSDP for 2021-22 is Rs900 billion including foreign aid of Rs101 billion. The projects with 80 percent expenditures have been proposed to fully financed for completion by June 2022. The government has proposed allocation of 57 percent allocation for infrastructure sector as the allocation stands at Rs509.2 billion. The government has allocated Rs103.555 billion for energy sector, Rs99.4 billion for water sector, Rs265.345 billion for Transport and Communication including viability gap fund (VGF) and Rs40.939 billion for Physical Planning and Housing Sector in the upcoming PSDP for 2021-22.

For social sector, the government proposed allocation of Rs169.710 billion for upcoming budget as it allocated Rs28 billion for health, Rs5.128 billion for education and training, Rs37 billion for Higher Education Commission, Rs15.261 billion for environment, Rs5.139 billion for manpower and employment, Rs74 billion for sustainable development goals (SDGs) as this program was run by PM’s discretionary funding through parliamentarians and Rs5.179 billion for other projects.

The government has allocated Rs5.746 billion for Governance projects. The PTI led government has proposed allocation of Rs29.396 billion for science and information technology out of which the allocated funds for Science was proposed at Rs12.204 billion and Rs17.191 billion for IT sector in the coming budget. The government proposed allocation of Rs15.505 billion in the coming budget out of which Rs3.473 billion allocated for Industries and Rs12.032 billion for neglected food and agriculture sector. The government also earmarked Rs37.407 billion for other requirements without mentioning any sector indicating that the discretionary funds will be allocated keeping in view the requirements during the course of next fiscal year.