ISLAMABAD: The total national development outlay for the next financial year will be over Rs 2000 billion. The government, keeping in view the growth in GDP of 5.8 percent, the highest rate in last 13 years, has fixed 6.2 percent growth target for 2018-19.
This was said by Minister of Planning Development and Reforms, after the day-long meeting of Annual Plan Coordination Committee (APCC), held here on Monday. He said as the ministry of finance has proposed Rs 750 billion worth federal PSDP, APCC has proposed National Economic Council (NEC) to at least approve Rs 1000 billion worth PSDP as a huge cut in development budget will create problems.
According to the minister, the target of inflation during the fiscal year 2018-19 has also been fixed at 6 percent while the target of total investment against GDP has been set at 17.2 percent. Agricultural development target will be 3.8 percent, industrial development target is to be 7.6 percent. The growth in the services sector is targeted to be 6.5 percent. A growth target of 3.8 percent has been fixed for the livestock sector.
The government has also fixed target of exports at $27.30 billion for the next financial year ending June 2019, while imports in the same year have been projected at $56.50 billion. The trade deficit is forecast to be $ 29.20 billion. The current account deficit is projected to be $ 12.50 billion which will be 3.8 percent of GDP.
The government has allocated Rs 61.50 billion for Azad Kashmir and Gilgit Baltistan for the next budget.
During the meeting of APCC, Ahsan Iqbal, unlike the budget proposed by Higher Education Commission (HEC) of Pakistan, has allocated Rs 45 billion against Rs 35 billion proposed by HEC, saying that the country needed more funds to promote education and research activities. He said that the government has increased the budget for education by over 132 percent during the past four years.
However, as per the working paper of APCC, a copy of which is available with Pakistan Today, the APCC was proposed to consider a developmental portfolio of Rs1763 billion for the fiscal year 2018-19 for the federal PSDP and provincial ADPs which is Rs350 billion less than the current PSDP. For the current fiscal year 2017-18, the NEC had approved the national development outlay at Rs2,113 billion with Rs1001 billion for Federal PSDP and Rs1112 provincial ADP.
However, the developmental portfolio this year is reduced to Rs 1763 billion which includes Rs750 Federal PSDP and Rs1013 Provincial ADPs.
According to the papers, the federal PSDP includes Rs607 billion-rupee component and Rs 143 billion FEC while provincial ADPs is Rs1013 billion which will include Rs 865-billion-rupee component and Rs148 billion FEC.
Finance Division, under Medium Term Budgetary Framework, conveyed the Indicative Budget Ceiling (IBC) for development budget for 2018/19 at Rs 645 billion for development programmes of Ministries / Executing Agencies. Since the indicated amount was not sufficient to meet the requirement of funds especially for CPEC projects, some of them were awarded Engineering Procurements Contract (EPC) mode and are at an advanced stage of completion.
Unlike the proposed cut in development budget allocation by finance division, the planning ministry had received the total demand of Rs 1900 billion from line Ministries/Divisions for ongoing and new schemes for PSDP 2018/19. Through consultative meetings with Ministries/Divisions, the total demand was rationalized at Rs. 1500 billion.
However, the Ministry of Planning requested the Finance Division to enhance the size of development budget to at least at Rs 1,300 billion so that all the sectors of the economy may flourish equally and follow the trajectory of balanced growth.
It may be recalled that after the APCC’s approval, the NEC is the final authority to approve the macroeconomic framework. The NEC is headed by the country’s prime minister and the provincial chief ministers are its members.