Govt to slash development funds in upcoming budget
The government has envisioned a subdued economic outlook for next fiscal year with gross domestic product forecast to grow by 4pc as the development programme comes under a virtual freeze.
This is the crux of the budget preparations ahead of Annual Plan Coordination Committee (APCC) meeting being held on Thursday after at least three postponements.
APCC is the first step for the country's development and economic policy makers to set the agenda for next year's economic and development agenda. Minister for Planning Mukhdum Khusro Bakhtiar will preside over the meeting to be attended by planning ministers for four provinces, AJK and GilgitBaltistan.
A senior government official said the GDP growth rate for 2019-20 has been estimated at 4pc (instead of provisional growth rate of 3.28pc this fiscal year), with a 3.7pc growth contribution from agriculture and about 2pc contribution from large-scale manufacturing.
The next year's fiscal deficit target is being set at about 6.2pc of GDP compared to 7.3pc of GDP estimated for the current year. He, however, said the final numbers would be finalised early in the morning ahead of the APCC meeting.
These sources said the Secretary Planning had called a meeting of the top officials of the Ministry of Finance and the State Bank to finalise macroeconomic targets for the next year, but did not allow discussions after seeing very junior level representations from the two major stakeholders.
A message from the central bank was also delivered to the Planning Commission to keep growth targets on the downside to represent understandings reached with the International Monetary Fund under $6bn bailout package that is yet to be formally signed. The fund has not yet set a date to take up Pakistan case for approval. Documents seen by media suggest the next year's Public Sector Development Programme (PSDP) will be kept unchanged at last year's Rs675bn level.
Even out of this an amount of Rs100bn would be set aside as block allocations under prime minister's programmes to be financially administered by the finance ministry. As such, the core PSDP would come down to Rs575bn - almost unchanged at a level revised by the PTI government under its supplementary budget.