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With budget date uncertain, APCC clears development outlay of Rs1.675 trillion
ISLAMABAD: The Annual Plan Coordination Committee (APCC), amid uncertain budget schedule over Prime Minister Nawaz Sharif’s availability, has approved a development outlay of Rs1.675 trillion with a tamed economic growth rate target of 5.7 per cent for the next fiscal year.
The scheduled meeting on May 30 of the National Economic Council (NEC) may have to be adjusted depending on the prime minister’s availability, said Minister for Planning, Development and Reforms Ahsan Iqbal on Friday after conclusion of the APCC meeting that was marred by a walkout by the Balochistan government.
As a consequence, the announcement of federal budget scheduled for June 3 could also be delayed. Responding to a question, Mr Iqbal said Finance Minister Ishaq Dar would recheck the prime minister’s itinerary to finalise the dates for the NEC meeting and the announcement of federal budget.
Under the Constitution, the NEC — led by the prime minister and comprising four chief ministers and as many federal ministers — has to formally approve the country’s annual development programme (ADP) and macroeconomic framework. The federal cabinet led by the prime minister then clears budgetary proposals for presentation before the parliament.
The Friday’s APCC meeting was disrupted for three hours over a verbal spat between the federal development minister and Balochistan Chief Minister Sardar Sanaullah Khan Zehri, who then walked out of the meeting with his team.
A participant said the chief minister wanted to speak after Mr Iqbal’s introductory remarks to protest over non-inclusion in the public sector development programme (PSDP) of development schemes he had recommended for the Sui area in Balochistan.
Mr Iqbal, however, reminded that funds earmarked for co-financed projects had not been utilised in the last three years and hence higher allocations could not be made and advised him to speak later.
Mr Zehri reacted by directing his team including provincial minister Hamid Khan Achakzai and chief secretary Saifullah Chattha to leave the meeting. They rejoined later on persuasion of Mr Iqbal who followed them to the Balochistan House.
On return, Mr Zehri told journalists that the point was made that the province should be given its due rights and fair share, and should be treated equally.
“The seriousness of Balochistan chief minister can be gauged from the fact that he is the only chief minister to attend APCC to raise issues of his province,” Mr Iqbal later said. He said the prime minister had instructed that Balochistan should be brought on a par with other provinces through development. “The federal government is giving its share in co-financed projects in provinces,” he said, giving examples of water projects in Karachi and Quetta.
It was, therefore, decided that there would be a follow-up meeting with provinces on Monday or Tuesday so that a consensus development plan could be presented to the NEC. Mr Iqbal said Balochistan’s allocation of last year would not only be protected but increased in the next year’s budget.
He said the APCC approved next year’s development outlay at Rs1.675tr, including Rs800 billion for federal and Rs875bn for provincial ADPs. The growth rate target was set at 5.7pc for the next year, which is higher by one percentage point compared to outgoing year’s 4.7pc growth rate, which was the highest in eight years.
The federal minister said the priority had been given to projects of the China-Pakistan Economic Corridor (CPEC) which could be completed at the earliest, and accelerating energy projects including those relating to the Water and Power Development Authority (Wapda) and transmission and distribution.
He said Rs31bn has been allocated for Dasu Hydropower Project and Diamer-Bhasha Dam for which $1bn land acquisition has been completed. The groundbreaking for these projects would be performed by the end of this year.
In a first, 3600-megawatt gas-based projects have been included in the PSDP while many projects of the CPEC would move ahead in the independent power project (IPP) mode so that these projects could be completed by 2017 to achieve a breakthrough in energy shortfall. Moreover, Rs130bn has been allocated in the next year’s PSDP for power sector projects.
He said the government was focussing on connectivity to enhance the country’s mobility with allocations of Rs190bn for the National Highway Authority (NHA). This would be in addition to development plans of NHA and Wapda from their own resources.
He said the Gwadar Port would be opened after 15 years with completion of Gwadar-Quetta project under the western route of CPEC in December this year followed by Gwadar-Khuzdar-Ratodero road.
He said a record amount of Rs21bn has been allocated for the Higher Education Commission next year. Railways has been allocated Rs40bn, Azad Jammu and Kashmir and Gilgit-Baltistan Rs25bn, the interior ministry Rs9.7bn, Rs27bn for the Pakistan Atomic Energy Commission, Rs100bn for security and the displaced people in tribal region, Rs20bn for Prime Minister’s Youth Programme and Rs25bn for gas development fund and Rs12bn for ports and shipping.
Based on base year growth rate of 4.7pc, the target for next year has been revised downward to 5.7pc to make them more realistic and to avoid criticism for missing targets.
In the medium-term macroeconomic framework announced by the government last year, the gross domestic product (GDP) was to grow by 6.5pc this year and the budget strategy paper approved by the federal cabinet earlier this month projected 6.2pc growth rate for the next year.
The annual plan for 2016-17 envisaged the agriculture sector to grow by 3.48pc next year against a contraction of 0.19pc this year. Important crops are expected to grow by 2.5pc next year against current year’s massive contraction of 7.19pc while other crops would grow by 3.2pc against this year’s fall of 0.31pc.
The overall industrial sector is targeted to grow by 7.7pc in FY17 against current year’s growth of 6.8pc. Of this, mining and quarrying is projected to increase by 7.4pc next year against current year’s increase of 6.8pc.
The manufacturing sector was targeted to grow by 6.06pc next year against this year’s improvement of 5pc. Likewise, the large-scale manufacturing is targeted to increase by 5.9pc against current year’s growth of 4.61pc.
The construction sector is expected to increase by 13.2pc next year against 13.1pc during current year while electricity generation and gas distribution is also expected to rise 12.5pc next year against 12.18pc increase this year.
The services sector is targeted to go up by 5.73pc next year against 5.7pc this year.
The size of GDP (measured by market price) was projected to increase to Rs33.063tr next year from current year’s provisional size of Rs29.598tr this year.
The target for next year’s total investment has been estimated at 17.7pc against current year’s 15.2pc of GDP while national savings are projected to grow to 16.1pc of GDP instead of 13.6pc during this year.
Inflation was projected to grow by 6pc next year while per-capita gross national product (GNP) has been estimated at Rs179,900 next year against Rs162,569 in current year.
ISLAMABAD: The Annual Plan Coordination Committee (APCC), amid uncertain budget schedule over Prime Minister Nawaz Sharif’s availability, has approved a development outlay of Rs1.675 trillion with a tamed economic growth rate target of 5.7 per cent for the next fiscal year.
The scheduled meeting on May 30 of the National Economic Council (NEC) may have to be adjusted depending on the prime minister’s availability, said Minister for Planning, Development and Reforms Ahsan Iqbal on Friday after conclusion of the APCC meeting that was marred by a walkout by the Balochistan government.
As a consequence, the announcement of federal budget scheduled for June 3 could also be delayed. Responding to a question, Mr Iqbal said Finance Minister Ishaq Dar would recheck the prime minister’s itinerary to finalise the dates for the NEC meeting and the announcement of federal budget.
Under the Constitution, the NEC — led by the prime minister and comprising four chief ministers and as many federal ministers — has to formally approve the country’s annual development programme (ADP) and macroeconomic framework. The federal cabinet led by the prime minister then clears budgetary proposals for presentation before the parliament.
The Friday’s APCC meeting was disrupted for three hours over a verbal spat between the federal development minister and Balochistan Chief Minister Sardar Sanaullah Khan Zehri, who then walked out of the meeting with his team.
A participant said the chief minister wanted to speak after Mr Iqbal’s introductory remarks to protest over non-inclusion in the public sector development programme (PSDP) of development schemes he had recommended for the Sui area in Balochistan.
Mr Iqbal, however, reminded that funds earmarked for co-financed projects had not been utilised in the last three years and hence higher allocations could not be made and advised him to speak later.
Mr Zehri reacted by directing his team including provincial minister Hamid Khan Achakzai and chief secretary Saifullah Chattha to leave the meeting. They rejoined later on persuasion of Mr Iqbal who followed them to the Balochistan House.
On return, Mr Zehri told journalists that the point was made that the province should be given its due rights and fair share, and should be treated equally.
“The seriousness of Balochistan chief minister can be gauged from the fact that he is the only chief minister to attend APCC to raise issues of his province,” Mr Iqbal later said. He said the prime minister had instructed that Balochistan should be brought on a par with other provinces through development. “The federal government is giving its share in co-financed projects in provinces,” he said, giving examples of water projects in Karachi and Quetta.
It was, therefore, decided that there would be a follow-up meeting with provinces on Monday or Tuesday so that a consensus development plan could be presented to the NEC. Mr Iqbal said Balochistan’s allocation of last year would not only be protected but increased in the next year’s budget.
He said the APCC approved next year’s development outlay at Rs1.675tr, including Rs800 billion for federal and Rs875bn for provincial ADPs. The growth rate target was set at 5.7pc for the next year, which is higher by one percentage point compared to outgoing year’s 4.7pc growth rate, which was the highest in eight years.
The federal minister said the priority had been given to projects of the China-Pakistan Economic Corridor (CPEC) which could be completed at the earliest, and accelerating energy projects including those relating to the Water and Power Development Authority (Wapda) and transmission and distribution.
He said Rs31bn has been allocated for Dasu Hydropower Project and Diamer-Bhasha Dam for which $1bn land acquisition has been completed. The groundbreaking for these projects would be performed by the end of this year.
In a first, 3600-megawatt gas-based projects have been included in the PSDP while many projects of the CPEC would move ahead in the independent power project (IPP) mode so that these projects could be completed by 2017 to achieve a breakthrough in energy shortfall. Moreover, Rs130bn has been allocated in the next year’s PSDP for power sector projects.
He said the government was focussing on connectivity to enhance the country’s mobility with allocations of Rs190bn for the National Highway Authority (NHA). This would be in addition to development plans of NHA and Wapda from their own resources.
He said the Gwadar Port would be opened after 15 years with completion of Gwadar-Quetta project under the western route of CPEC in December this year followed by Gwadar-Khuzdar-Ratodero road.
He said a record amount of Rs21bn has been allocated for the Higher Education Commission next year. Railways has been allocated Rs40bn, Azad Jammu and Kashmir and Gilgit-Baltistan Rs25bn, the interior ministry Rs9.7bn, Rs27bn for the Pakistan Atomic Energy Commission, Rs100bn for security and the displaced people in tribal region, Rs20bn for Prime Minister’s Youth Programme and Rs25bn for gas development fund and Rs12bn for ports and shipping.
Based on base year growth rate of 4.7pc, the target for next year has been revised downward to 5.7pc to make them more realistic and to avoid criticism for missing targets.
In the medium-term macroeconomic framework announced by the government last year, the gross domestic product (GDP) was to grow by 6.5pc this year and the budget strategy paper approved by the federal cabinet earlier this month projected 6.2pc growth rate for the next year.
The annual plan for 2016-17 envisaged the agriculture sector to grow by 3.48pc next year against a contraction of 0.19pc this year. Important crops are expected to grow by 2.5pc next year against current year’s massive contraction of 7.19pc while other crops would grow by 3.2pc against this year’s fall of 0.31pc.
The overall industrial sector is targeted to grow by 7.7pc in FY17 against current year’s growth of 6.8pc. Of this, mining and quarrying is projected to increase by 7.4pc next year against current year’s increase of 6.8pc.
The manufacturing sector was targeted to grow by 6.06pc next year against this year’s improvement of 5pc. Likewise, the large-scale manufacturing is targeted to increase by 5.9pc against current year’s growth of 4.61pc.
The construction sector is expected to increase by 13.2pc next year against 13.1pc during current year while electricity generation and gas distribution is also expected to rise 12.5pc next year against 12.18pc increase this year.
The services sector is targeted to go up by 5.73pc next year against 5.7pc this year.
The size of GDP (measured by market price) was projected to increase to Rs33.063tr next year from current year’s provisional size of Rs29.598tr this year.
The target for next year’s total investment has been estimated at 17.7pc against current year’s 15.2pc of GDP while national savings are projected to grow to 16.1pc of GDP instead of 13.6pc during this year.
Inflation was projected to grow by 6pc next year while per-capita gross national product (GNP) has been estimated at Rs179,900 next year against Rs162,569 in current year.
