APCC to finalise Rs1.5tr development programme

Source:  Dawn.com Published in Business & Economy on Thursday, May 12, 2016

ISLAMABAD: The Annual Plan Coordination Committee (APCC) meets on May 23 to finalise a Rs1.5 trillion development programme, targeting to achieve economic growth rate of 6.2 per cent during fiscal year 2016-17.

The meeting will review the performance of economy as targeted in the annual plan of 2015-16 and clear the plan of 2016-17, setting macroeconomic indicators for next year, besides recommending public sector development programme (PSDP).

Informed sources said Finance Minister Ishaq Dar is expected to make a special appearance in the meeting, to be presided over by Minister for Planning and Development Ahsan Iqbal, to ensure a broader agreement on development plans to avoid any controversy when these come up for approval by the National Economic Council (NEC).

The NEC is headed by the prime minister and comprises provincial chief ministers, key federal ministers, the prime minister of AJK, chief executive of GB and governor of KP representing Fata.

Next year’s annual plan envisages Gross Domestic Product (GDP) growth rate of 6.2pc against this year’s growth target of 5.5pc. The current year’s target has been estimated to be missed by more than 0.5pc. It also seeks to jack up total investment to 18.7pc of GDP for next year with rate of inflation projected at 6pc.

Tax-to-GDP ratio has been targeted at 12.5pc next year and debt-to-GDP ratio at 59.4pc. The overall size of the GDP has been estimated at Rs34.801tr next year, up from current year’s Rs30.672tr.

The consolidated PSDP for next fiscal year has been estimated at Rs1.497tr, up 15pc from current year’s Rs1.3tr. This would account for 4.3pc of GDP against current year’s allocation of 4.2pc of GDP. The PSDP 2016-17 would include Rs800 billion federal PSDP, including security operations and resettlement costs of about Rs100bn, up from current year’s allocation of Rs700bn.

An official said the federal PSDP could be slightly increased at the NEC level on the desire of the prime minister. A major chunk of Rs210bn is being earmarked for energy sector projects for next year while Rs467bn would be spent on infrastructure development. The federal PSDP would remain static at 2.3pc of GDP.

The cumulative size of the provincial annual development plans has been estimated at Rs697bn, accounting for 2pc of GDP, up from current year’s allocation at 1.9pc of GDP.

An official said that the Planning Commission was still insisting on increasing the Federal Public Sector Development Programme beyond Rs800bn to accommodate some social sector projects as major chunk of the PSDP size indicated by the Finance Ministry would stand consumed in two major priority areas of energy and China-Pakistan Economic Corridor.

This was important, said the official, because more than Rs100bn for security-related expenditure and settlement of displaced persons would also continue to be part of the PSDP, like current fiscal year.

It was in this background that the planning minister had a pre-budget meeting with KP government here on Wednesday to allay any concerns on CPEC-related issues.

The two sides expressed satisfaction, according to an official statement, over the implementation of All-Parties Conferences (APCs)’s decisions on Western route of CPEC and resolved to move on others projects through mutual coordination.

Attended by Mr Ahsan Iqbal and KP Chief Minister Pervez Khattak and other provincial leaders, it also discussed development of industrial economic zones on the western route. It was agreed that Indus Highway upgradation will be prioritised and Kohat-Jund Road will be included in PSDP-2016-17.

The meeting was informed that Peshawar-DI Khan section of railway was covered under CPEC. “CPEC is not the project of one government or PML-N government has any monopoly over it. It is a long-term project up to 2030, and future four governments will continue to work on this project,” Ahsan Iqbal told the provincial leadership.

The minister said it should be kept in mind that China didn’t put $46bn at the discretion of Pakistan to distribute it among federating units. “It is portfolio investment with major chunk of $35bn in energy sector” and Karakoram Highway was central project in CPEC.