APCC seeks Rs2.3tr for devel­op­ment in FY19

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The An­nual Plan Co­or­di­na­tion Com­mit­tee (APCC) ap­proved a de­vel­op­men­tal port­fo­lio of Rs1.763 tril­lion for next fis­cal year with a re­quest for its en­hance­ment to Rs2.313tr by Na­tional Eco­nomic Coun­cil (NEC) to achieve eco­nomic growth rate of 6.2pc.

The meet­ing presided over by Min­is­ter for Plan­ning and Devel­op­ment Ah­san Iqbal was at­tended by min­is­ters for plan­ning from the prov­inces and spe­cial ar­eas like Azad Kash­mir and Gil­git-Baltistan.

Mr Iqbal, in a brief in­ter­ac­tion with me­dia, said he hoped to in­crease devel­op­ment bud­get for next year be­yond Rs2tr, in­clud­ing a min­i­mum of Rs1tr for fed­eral pro­gramme to en­sure GDP growth rate of 6.2pc next year and 6.6pc the year af­ter. He said he had told the prime min­is­ter funds in­di­cated by the fi­nance min­istry would af­fect the growth mo­men­tum and re­quested for the in­crease.

The over­all in­dica­tive devel­op­ment bud­get of Rs1.763tr in­cludes provin­cial An­nual Devel­op­ment Plans (ADPs) of Rs1.013tr and fed­eral Pub­lic Sec­tor Devel­op­ment Pro­gramme (PSDP) of Rs750bn.

Be­cause of fi­nal year of the cur­rent assem­blies, a clear ef­fort ap­peared to have been made by the cen­tre and the prov­inces to an­nounce re­duced devel­op­ment size than last year. For ex­am­ple, the size of the fed­eral PSDP was set at Rs750bn for next year against Rs1.001tr of cur­rent year, down 25pc. Like­wise, the provin­cial port­fo­lio was put at Rs1.013tr for next year against Rs1.112tr of cur­rent year, down 9pc.

An of­fi­cial said the meet­ing ap­proved devel­op­ment projects for fed­eral PSDP within an in­dica­tive ceil­ing of Rs750bn of the Min­istry of Fi­nance but de­cided to re­quest the NEC led by the prime min­is­ter to en­hance it to Rs1.3tr.

In case of NEC’s ap­proval, the Plan­ning Com­mis­sion would in­clude more projects in the next year’s devel­op­ment bud­get.

The meet­ing also ap­proved macroe­co­nomic frame­work for the next year en­vis­ag­ing 6.2pc growth rate sup­ported by 3.8pc growth in agri­cul­ture, 7.6pc in in­dus­try and 6.5pc in­crease in ser­vices sec­tor.

Most of the macroe­co­nomic in­di­ca­tors for next year were set slightly higher than cur­rent year per­for­mance. For ex­am­ple, the cur­rent year growth rate was put at 5.8pc that in­cluded 3.8pc im­prove­ment shown by agri­cul­ture, 5.8pc of in­dus­try and 6.4pc of ser­vices. The tar­get for large-scale man­u­fac­tur­ing was set at 8.1pc com­pared to 6.1pc growth achieved dur­ing cur­rent year.

The tar­get for rate of in­fla­tion was set at 6pc for next year com­pared to 4pc of this year. To­tal in­vest­ments for next year tar­get to reach 17.2pc of GDP com­pared to 16.4pc of cur­rent year while na­tional sav­ings are es­ti­mated to in­crease to 13.3pc next year from cur­rent year’s 12.1pc of GDP.

Ex­ports are pro­jected to go up to $27.3bn com­pared to $24.5bn of cur­rent year while im­ports would in­crease to $56.5bn from $53.1bn this year. That would mean the trade deficit in­creas­ing to $29.2bn against $28.6bn this year. The cur­rent ac­count deficit, on the other hand, is pro­jected to come down to $12.5bn (3.8pc of GDP) next year from $13.7bn (4.4pc of GDP) this year.

Since the in­di­cated amount was not suf­fi­cient to meet the re­quire­ment of funds es­pe­cially of CPEC projects, some of them awarded on En­gi­neer­ing Pro­cure­ments Con­tract (EPC) mode and at ad­vance stage of com­ple­tion, the Plan­ning Com­mis­sion rec­om­mended in­creas­ing fed­eral PSDP to Rs1.3tr.

The meet­ing was told that the Plan­ning Com­mis­sion had re­ceived to­tal de­mands of Rs1.9tr from min­istries, di­vi­sions and agen­cies for on­go­ing and new schemes for PSDP 201819. Through con­sul­ta­tive meet­ings with min­istries/di­vi­sions, the to­tal de­mand was ra­tio­nalised at Rs1.5tr.

Fi­nally, the meet­ing de­cided to ex­clude all the un­ap­proved projects from the PSDP when in­formed that 332 such schemes were al­lowed in the devel­op­ment port­fo­lio of last year, re­sult­ing in slow util­i­sa­tion of funds.

The next year PSDP was based on prin­ci­ple of fully fi­nanc­ing the on­go­ing projects hav­ing more than 70pc ex­pen­di­ture al­ready made while for­eign-funded projects should be pro­vided re­quired ru­pee cover.

The CPEC-re­lated projects would also get max­i­mum funds re­quired while “se­cu­rity-re­lated projects must be al­lo­cated de­manded funds.”

The al­lo­ca­tions for spe­cial ar­eas ad­min­is­tered di­rectly by the cen­tre like AJK, Fata and GB would re­main un­changed at Rs61.5bn while spe­cial fed­eral projects that were used to be pro­vided funds on the di­rec­tives of the prime min­is­ter would not be given funds next year against Rs100bn this fis­cal year.

Wa­ter sec­tor would be given Rs41bn next year, in­clud­ing Rs18bn for Di­amer-Bhasha dam and Rs8bn for Right-Bank Out­fall Drain. Na­tional High­way Author­ity would get Rs233bn next year com­pared to Rs320bn dur­ing this fis­cal year while power sec­tor would get Rs33bn next year against Rs61bn this year, show­ing re­duced re­quire­ment for CPEC-re­lated in­fra­struc­ture and en­ergy projects.

Min­istries and Di­vi­sions have been al­lo­cated Rs305bn which in­cludes Rs274bn lo­cal com­po­nent and Rs31bn For­eign Ex­change Com­po­nent.

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