ISLAMABAD (Eshfak Mughal):- The National Economic Council (NEC) to approve macroeconomic indicators including the targets of Public Sector Development Program, GDP growth, Current Account Deficit, inflation and investment for next fiscal year on Tuesday.
The NEC will meet under the chairmanship of Prime Minister Shehbaz Sharif here in Islamabad to give final approval of recommendations of Annual Plan Coordination Committee (APCC) on macroeconomic indicators for the next fiscal year. Four provincials Chief Ministers, Chief Minister Gilgit Baltistan, Prime Minister Azad Kashmir, Federal Ministers will also attend the meeting.
The APCC has recommended Rs800 billion for federal development plan and Rs 1384 billion for four provincial Annual Development Plans (ADP) for next fiscal year. Out of total Federal PSDP for next fiscal year, the APCC has earmarked Rs60 billion for providing developments funds to parliamentarians under the Sustainable Development Goals (SDGs).
The Punjab government has proposed spending Rs585 billion on development in the next fiscal year, down by Rs45 billion or 7%. However, the Sindh government has proposed Rs355 billion under the annual development plan, up by 64% or Rs138 billion over this year’s revised allocation.
The Khyber-Pakhtunkhwa government too has indicated Rs300 billion spending plan up by Rs54 billion or 22%, but the Balochistan government has shown a 21% reduction in spending for next year, down from Rs180 billion to Rs143 billion.
Out of total Federal PSDP, the energy sector has been given Rs84 billion, water resources will receive Rs83 billion including Rs18 billion for Diamer-Bhasha dam and Rs55.4 billion for the Dasu hydropower project.
The social sector bagged Rs144 billion including the High Education Commission received nearly Rs42 billion, the health ministry has been given Rs12 billion, the agriculture sector has been given Rs13 billion.
The Rs800 billion federal PSDP was equal to 46% of what the ministries had demanded from the government for the next fiscal year. The major chunk of demands was received from the water resources ministry that sought Rs279 billion but was allocated Rs97 billion.
The National Highway Authority demanded Rs317 billion but would receive Rs121.5 billion or 38% of its demand.
The Pakistan Atomic Energy Commission (PAEC) placed a demand of Rs175 billion but the government has allocated Rs25.6 billion or less than 15% of the demand. Out of Rs25.6 billion, a major chunk — Rs15.8 billion — has been allocated only for Karachi’s nuclear power plants.
The Power Division demanded Rs98 billion and received Rs50 billion or half of its demand.
The Aviation Division had asked for Rs30 billion but was given Rs2.4 billion, including a mere Rs2 billion for the Gwadar International Airport project.
For K-P’s merged districts, the government has approved an allocation of Rs50 billion for the next financial year. The up-scaling green Pakistan programme has been given Rs9.5 billion.
The provinces and special areas have been allocated Rs96.5 billion aimed at accommodating allied parties’ development projects and finishing a few ongoing schemes. Out of this, Punjab will get Rs16.7 billion, Sindh Rs1.4 billion and K-P Rs3.6 billion.
Balochistan will receive Rs20.4 billion, as some schemes of the coalition government’s ally in Dera Bugti, which began this year and will be finished next year – have been given full allocations.
The two road projects of Dera Bugti will get the full remaining sum of Rs624 million.
Azad Jammu and Kashmir (AJK) and Gilgit-Baltistan have been given Rs29.4 billion and Rs25 billion for development respectively.
The committee has also suggested the target of current account deficit for fiscal year 2022-23 at 2.2% of gross domestic product (GDP), or over $10 billion.
The GDP growth will slightly taper off and is envisaged at 5% for 2022-23 on the back of growth in agriculture sector (3.9%), manufacturing (7.1%) and services (5.1%), according to the APCC.
The APCC approved and recommended the average inflation target at 11.5% for the next fiscal year.
The projected agriculture sector growth at 3.9% is mainly contingent upon the increase in cotton and wheat production, consistent availability of water, certified seeds, fertilisers, pesticides and agricultural credit facilities.
The industrial growth momentum will also be moderated owing to fiscal consolidation but large-scale manufacturing (LSM) is projected to sustain growth at 7.4% during 2022-23.
There are downside risks to the LSM growth from high costs and low supplies of energy inputs, exchange rate-related uncertainties and Russia-Ukraine war-related supply shocks, which have the potential to impact the manufacturing sector.
The overall manufacturing sector is projected to post growth of 7.1% in the next fiscal year.
The services sector will also slow down to 5.1%, which is lower than its five-year pre-Covid annual average growth of 5.3%.
Investment level for 2022-23 is expected to decrease to 14.7% of GDP due to stabilisation and the uncertain economic environment while the national savings rate is targeted at 12.6% of GDP.
The APCC underlined that fiscal consolidation would be pursued and efforts would be made to bring down the fiscal deficit through a combination of revenue enhancement and expenditure management policies.