PSDP 2011-12: National Economic Council likely to meet on May 28

National Economic Council is likely to meet under the chairmanship of Prime Minister, Syed Yousaf Raza Gilani on May 28 to review and approve PSDP size of Rs 720 billion, out of which Rs 280 billion would be for federal ministries, Rs 10 billion for Earthquake Reconstruction & Rehabilitation Authority (Erra) and Rs 430 billion for provincial programme in the financial year 2011-12.
According to the sources, NEC would also finalise other matters relating to budget 2011-12. The Planning Commission submitted to the NEC that because of reduction in the PSDP size during last two years, most projects were suffered from cost and time overruns, thus the ECC should direct the Finance Division not to make downward adjustment in the PSDP 2011-12. The commission also sought authorisation to review projects where expenditure is less than 30 percent with federal ministries and provincial governments and take decision about their continuation or otherwise. Planning Commission also asked for authority to make adjustments in the detailed programme while maintaining sectoral priorities and remaining within proposed federal size of Rs 280 billion for 2011-12, sources said.
The sources further said that the Annual Plan Co-ordination Committee has directed the Ministries/Divisions to critically review their ongoing portfolio and where expenditure is less than 30 percent, it may be deferred, and only concentrate on completion of ongoing projects. The committee also directed the executing agencies that early completion of projects will not only bring benefit to the economy but would also avoid cost overruns. According to the proposed PSDP 2011-12, 96 percent of resources have been allocated to ongoing projects to ensure their timely completion.
The committee has also advised the ministries to take steps for careful use of limited resources to enhance productivity and bring material change to the economy in the shortest possible time. The committee, while realising resource position, has limited its recommendation within the indicative budget ceiling. However, it recommended that Erra allocation of Rs 10 billion may be kept over and above Rs 280 billion as per past practice.
The strategy envisaged in the proposed PSDP-2011-12 will focus on the "software" of economic growth including issues of economic governance, institutions, incentives, human resources so as to provide an environment in which the "hardware" of growth ie physical infrastructure could be expanded and made more productive at every level.