Rs3.792trn development outlay approved

ISLAMABAD: A meeting of the National Economic Council (NEC) has approved Rs3.792 trillion consolidated development outlay for the next fiscal year with an increase of 57 per cent over Rs950 billion for the current fiscal year federal PSDP to achieve GDP growth target of 3.6 per cent.

Sources said that the meeting presided over by Prime Minister Shehbaz Sharif and attended by the provincial chief ministers as well provincial minister for planning and development and adviser to the chief minister, have approved Rs1.5 trillion federal PSDP for the next fiscal year including Rs100 billion for public private partnership and SOEs investment of Rs196 billion and provincial annual development plans of Rs2.095 trillion.

Provincial ADPs of the provinces that have been approved by the NEC included Punjab Rs700 billion, Sindh Rs764 billion, Khyber-Pakhtunkhwa Rs351 billion, and Balochistan Rs281 billion.

FD agrees to provide Rs1.2trn for FY25 PSDP

The federal PSDP included Rs824 billion for infrastructure projects, Rs280 billion for the social sector, Rs75 billion for Special Areas (AJK, GB), Rs64 billion for merged districts, Rs79 billion for IT, Rs28 billion for governance, Rs50 billion for productions sector, Rs42 billion for food and agriculture and Rs8 billion for industries.

The meeting approved 3.6 per cent growth target for the next fiscal year based on two percent growth in the agriculture sector, 4.4 percent in the industrial sector, and 4.1 per cent in the services sector.

The total investment-to-GDP ratio is projected at 14.2 percent for 2024-25 fiscal year and fixed investment at 12.5 per cent, whereas, national savings are at 13.3 per cent of the GDP for 2024-25.

Inflation is expected to moderate to 12per cent for the next fiscal year, whereas, the current account deficit is expected to widen in 2024-25 with further easing of import restrictions for achieving the growth objectives, especially for the revival of the industrial sector.

The meeting of the NEC was informed about the annual development plan and performance for 2023-24 and the proposed development plan for 2024-25. The meeting was told that the growth rate target for the next year has been increased. The prime minister said on this occasion that agriculture is the backbone of the country’s economy, adding that consultation with the provinces is very important for the development of agriculture and it should be ensured that the proposals of the provinces regarding agriculture and other sectors are included in the plan. The meeting approved in principle the economic growth targets, the macroeconomic framework for the annual plan 2024-25, the publication of the Annual Plan 2024-25 and the ministries, provinces and special institutions to ensure the implementation of this plan.

The meeting of the council was also given a detailed briefing on the thirteenth five-year development plan.

The council was told that the goals of the project include the development of every region of the country, especially the backward areas, increase in exports, promotion of small and medium scale industries, social security and poverty alleviation, increasing the efficiency of the workforce, in the direction of knowledge economy. Action plans are included to prevent development and the adverse effects of climate change.

The meeting directed the Ministry of Planning to present a comprehensive action plan to the provinces with clear targets in various sectors for a positive role in the national economy and an increase in exports. It was further directed that provinces should be included in the consultation process to achieve the goal of the overall growth rate of the economy and for this, it should be started with important sectors such as agriculture.

The NEC was briefed about the national goals for the recovery of the economy and the development of the country and the measures to achieve them.

The meeting was informed that production of export products, innovation of agriculture, artificial intelligence and information technology sector in line with international standards, sustainable and renewable energy, effective use of water resources, development of youth and women and CPEC. The NEC approved the thirteenth five-year development plan in principle.

The review of the development budget of 2023-24 and the proposed decimals of the development budget of 2024-25 were also presented to the NEC meeting and it was told that CPEC positions, international investment projects, ongoing projects close to completion will be given priority in the upcoming development budget.

Apart from this, Sustainable Development Goals (SDGs) will be included in the development budget besides prioritising backward areas.

The meeting granted approval to these measures.

The report on the performance of the Central Development Working Party (CDWP) and the Executive Committee of the National Economic Council (ECNEC) from April 1, 2023 to May 1, 2024 was also presented to the NEC.

The prime minister has directed the NEC to set up a committee to harmonise it with the modern requirements. In detailed consultation with the provinces and other stakeholders, the committee will formulate proposals not only to make the NEC more active but also to harmonize it with contemporary requirements.

Copyright Business Recorder, 2024