ISLAMABAD: A consultative meeting of the Annual Plan Coordination Committee (APCC) proposed a total outlay of Rs 630 billion Public Sector Development Programme (PSDP) for the financial year 2020-2021.
The APCC met with Planning Commission deputy chairman Jahanzeb Khan in the chair at P-Block Secretariat on Thursday. Representatives of federal ministries, State Bank, finance ministry, provincial and special area governments participated in the meeting.
In the PSDP 2020-2021, out of total, 59 percent proposed allocation has been provided to infrastructure, 35 percent to social sector, and the remaining six percent to other sectors.
For the next year, preference has been given in allocation of funds to social sector by proposing an allocation of 35 percent (Rs185 billion) of the PSDP compared to the financial year 2019-2020 where this allocation was in the range of 16 percent.
The government has taken this step to improve the life of the common man by providing good health, education, clean environment, clean drinking water and improving overall standard of living of the masses.
The Transport and Communications sector has been proposed Rs159 billion, energy Rs70 billion, water Rs64 billion, health and population Rs18 billion, education including the HEC Rs34 billion, physical planning and housing Rs19 billion, the SDGs Rs41 billion, Special Areas (AJ&K, GB) Rs40 billion, and merged district of KP Rs40 billion.
Under the special programme for improving the quality of life of common people Rs100 billion have been proposed.
The major strategy for PSDP 2020-2021 is focus on completion of ongoing projects; the Covid-19 responsive development programme; more funds have been proposed for social sector compared to infrastructure than the past years and funding of only approved projects as per provision of the Public Finance Management Act, 2019.
The sources told that in the water sector, the APCC proposed Rs63 billion for the next financial year 2020-2021.
The large multi-purpose dams particularly Diamir Bhasha, Mohmand, Dasu dams and drainage projects have been proposed adequate funds.
Small scale provincial nature dams and drainage projects for less-developed districts have been proposed allocations.
Major ongoing projects of Railways including ML-1, Maritime Affairs Karachi Shipyard and inter-provincial/regional connectivity have been proposed financing.
Similarly, major portion of western route has also been proposed funds.
In the energy sector, the focus remained on projects of power evacuation, expansion, improving transmission and distribution system to minimize line losses and circular debt.
Projects for supply of power and gas to the SEZs have also been proposed financing.
According to the sources, Balochistan government strongly protested for not entertaining development projects related to water in infrastructure by the federal government.
Federal government said it was principally decided that unapproved projects would not be included in PSDP-2020-2021. However, the federal government has received a list of the development projects from the provincial government.
The Balochistan government has urged the federal government to include a list of the development projects in the coming development budgt-2020-2021.
The health sector is a priority in the wake of the Covid-19 to provide improved health services, preventions and control of communicable diseases, production of medical devices and capacity enhancement of health institutions.
The primary focus would be on strengthening promotive, preventing care and the public health and hygiene system with supporting community resilience in the country.
Next year will be challenging too, but economy will learn to live with Covid-19 phenomenon and growth will improve to over two percent, with agriculture despite of locust attack impact will post positive growth and some revival is expected in the services sector.
Inflation will be in the lower single digit next year, and external account will be comfortably placed with lower current account deficit.
However, exports and remittances are likely to face challenging global environment.
The APCC was told that the economy was heading towards revival until beginning of the March 2020; however with emergence of Covid-19 pandemic economic landscape has changed.
Before Covid-19 exchange rate stability, barring tax revenues overall fiscal performance was satisfactory, reserves were build-up, current account deficit was reduced massively, inflation after peaking in January started deceleration, remittances were improving and QIM was going up with reduction in extent of contraction and the IMF targets for three quarters were fully met.
Economic growth was set to rise over three percent but because of Covid-19 came down to negative 0.4 percent as industrial and services sector were badly affected.
Pressure on government spending mounted, exports contracted in April 2020 but imports fell much more quickly.
Secretary Ministry of Planning, Development and Special Initiatives said APCC was a consultative body and macroeconomic and development framework would be subject to adjustment in the light of the recommendations of the APCC.
The deputy chairman highlighted the importance of finalizing Covid-19 responsive Annual Plan.
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