ISLAMABAD: The Annual Plan Coordination Committee (APCC) has approved Rs1,221 billion federal PSDP for the next fiscal year and set a growth target of 3.6 percent and stated that growth prospects hinges upon political stability, exchange rate, macroeconomic stabilisation under the International Monetary Fund (IMF) programme and expected fall in global oil and commodity prices.
The meeting of the APCC, presided over by the Planning Commission Deputy Chairman, Dr Jahanzeb, and attended by the officials of federal ministries/divisions, provincial governments and the State Bank of Pakistan, was told that the ministries/divisions set the growth target for the next fiscal year at 3.6 percent based on two percent growth of agriculture sector, 4.4 percent growth of industrial sector and 4.1 percent for services sector.
The provincial governments were requested for sharing information regarding annual development plans (ADPs) including sectoral break-up data regarding respective ADPs for budget estimates 2024-25 and Punjab and Sindh shared their ADPs of Rs700 billion and Rs763.7 billion respectively.
APCC meets on June 2 to propose PSDP budget
The official document revealed that the Ministry of Planning stated that due to the IMF programme, primary deficit has been managed with a cut on PSDP, which has worsened the development investment in the country.
Sources said the Ministry in the working papers stated that challenges in PSDP 2024-25 formulation included; (i) Rs184 billion liability rollover from 2023-24 due to 20 per cent cut in size of PSDP 2023-24; (ii) thin spreading of PSDP allocation and Rising throw-forward; (iii) unprecedented rupee depreciation and price hike of inputs; (iv) additional demands of important projects over and above IBCs; (v) huge demand for rupee cover against FEC/FA component; (vi) rising burden of provincial nature projects on federal PSDP;(vii) increasing number of new schemes particularly of DDWP level; (viii) at source deduction of CDL against PSDP releases; (ix) needs of post-flood 2022 rehabilitation (4RF) and 5Es initiatives.
The federal PSDP for the next fiscal year included; (i) Rs877 billion for infrastructure projects with Rs378 billion for energy sector, Rs173 billion for transport and communication, Rs284 billion for water and Rs42 billion for physical planning and housing; (ii) Rs83 billion for social sector – Rs17 billion for health, Rs32 billion for education including HEC, and Rs34 billion for others; (iii) Rs51 billion for special areas (AJ&K and GB); (iv) Rs57 billion for merged districts; (v) Rs104 billion for Science and IT; (vi) Rs29 billion for governance; (vii) Rs14 billion for food and agriculture and Rs7 billion for industries. The ministry did not propose allocation for SDGs in the federal PSDP for the next fiscal year.
The Planning Ministry in a statement said the meeting was told that initially requested over Rs2.8 trillion for projects. However, due to fiscal constraints, the essential funding requirements were discussed with the Ministry of Finance and consequently, the provisional size of the PSDP was set at Rs1,221 billion.
The APCC advised Ministries/Divisions to prioritise core national projects, foreign-aided projects, fund projects with high expenditures for timely completion, prioritise federal, clear pending liabilities. The PSDP formulation process was guided by NEC and SIFC recommendations/directions.
The sectoral strategy of the proposed PSDP 2024-25 includes allocations for infrastructure development and promoting industrial linkages, energy sufficiency, augmenting water resources, improving transport and communications, emphasizing social sectors, science and IT, governance, production sectors, and ensuring balanced regional development.
The ministry added that Pakistan’s economy faced significant challenges at the beginning of 2023-24, primarily due to lagged impacts of economic disruptions of the previous year.
However, the economy moderately recovered in 2023-24 and grew by 2.4 per cent. The primary driver of growth was the agriculture sector, posting a growth rate of 6.3 per cent, owing to bumper outputs of wheat, cotton and rice. Industrial sector grew by 1.2 percent mainly due to a slowdown in large-scale manufacturing activities.
Copyright Business Recorder, 2024
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