Govt says 3.5pc growth target quite realistic

ISLAMABAD: Federal Minister for Planning, Development and Special Initiatives, Ahsan Iqbal Tuesday said the National Economic Council (NEC) approved Rs1,150 billion federal development budget and set an estimated 3.5 percent Gross Domestic Product (GDP) growth target for the next financial year 2023-24.

The NEC proposed the Annual Development Plan (ADP) for the upcoming fiscal year (2023-24) with a total outlay of Rs2.709 trillion.

Addressing a news conference here, the minister said the NEC increased the federal development budget from Rs1,100 billion to Rs1,150 billion for the financial year 2023-24.

PSDP allocates Rs1.1trn: Govt sets 3.5pc GDP growth target for FY24

“The total national outlay contains the development budget of Punjab and Khyber-Pakhtunkhwa for only four months due to caretaker set up in the province, but if their full budget is included in the ADP, it will exceed the figure of Rs3 trillion,” the minister said.

Under the ADP, the minister said the federal government will spend Rs1,150 billion under the Public Sector Development Programme (PSDP 2023-24) while the provinces will allocate Rs1,559 billion to execute different development projects.

He said Rs1,150 billion under the PSDP was the highest-ever allocation made in the history of the country, terming it a “milestone achievement” of the incumbent government, despite severe financial challenges.

He said that the NEC — the country’s highest forum of the federation on economic decision-making — had approved an energy conservation plan under which shops and commercial centres would be closed by 8pm.

He said that Prime Minister Shehbaz Sharif chaired the NEC which was attended by the chief ministers of Punjab, Sindh and KP, and the planning minister of Balochistan.

The minister said that issues pertaining to energy and infrastructure were discussed during the meeting, adding that “energy is become a huge challenge for Pakistan due to global prices”.

He said, “Saudi Arabia has cut down oil production by one million barrels, which poses a risk of oil prices rising to $100 per barrel. If the country continued to rely on fossil fuel and oil for its energy needs, then our economy will remain vulnerable”.

To counter this, the minister said, one of the measures that the government wanted to implement pertained to energy conservation.

He said that the federal cabinet had vowed to enforce decisions under a National Energy Conservation Plan in January this year. “But there was no representation of provinces in that meeting. So we took it up again in the NEC, where provincial government representatives were also present.”

“And now we hope that provincial governments will ensure the implementation of the energy conservation package that has been approved today.”

He said that the federal cabinet in January proposed closure of markets at 8:30pm and wedding halls at 10pm, the use of efficient electronic appliances, and a 40 per cent reduction in power consumption in government offices.

He said that the NEC also recommended the imposition of additional duties on inefficient electric fans, the use of LED bulbs, the introduction of electric bikes, and phasing out motorcycles that run on petrol and illuminating street lights only at 50 per cent capacity.

He said that steps for energy conservation recommended under this plan, such as the closure of shops and commercial centres by 8pm, switching to LED lights and upgrading geysers to make them more energy efficient, could help the country save up to $1 billion annually.

He said that even rich nations in Europe and the US could not “afford the luxury of keeping commercial areas open till 10pm or 11pm”.

He said that another decision taken regarding the energy sector was to promote green energy. He said that the projects of solar, wind, and hydel energy would be promoted and we would not introduce any new project based on imported fuel.

He said that the government is set to present the annual budget on Friday, at a time when Pakistan faces its worst economic crisis with months of delay in securing funding from the International Monetary Fund (IMF).

He said that the economic growth of the country was linked to its political stability. “We’re taking those choices which take the country toward stability,” he said.

Answering a question, the minister, while pointing out the dismal condition of the economy, said the government would not be able to pay off debt fully through federal revenue. “This is a defining moment where we’ve reached. The country will need to borrow for the rest of the budget that includes salaries for the government, the defence budget, the development budget, pensions, and subsidies,” he said.

He said that Pakistan, which is also in political turmoil, has been caught up for months in an acute balance of payments crisis, with its central bank’s foreign exchange reserves dipping to as low as to cover hardly a month of controlled imports.

The minister said that the government allocated Rs100 billion for the projects of youth including digital, information technology, and laptops etc. He said that the government increased the development budget from Rs44 billion to Rs60 billion for the Higher Education Commission (HEC).

He said that for water security, the government increased from Rs57 billion to Rs110 billion development budget for the next financial year. He said that the government increased Rs55 billion to Rs61 billion development budget for Gilgit-Balistan (GB) and Azad Jammu and Kashmir (AJK).

He said that we increased sufficient development budget as compared to the other provinces. He said that the government has allocated Rs137 billion for Balochistan, Rs80 billion for Sindh, and Rs79 billion for Punjab.

Answering a question about health cards, the minister said that the prime minister has constituted a committee to rationalise it.

Copyright Business Recorder, 2023