ISLAMABAD: The government has decided to convene National Economic Council (NEC) meetings in January and in May or June every year, after Chief Minister Sindh, Murad Ali Shah pointed out that under Article 156 (4) of the Constitution two meetings of the NEC were required to be held every year.
The minutes of NEC meeting held on June 7, 2021, with Prime Minister, Imran Khan in the chair, issued after one-month reveal that Chief Minister Sindh expressed concerns regarding the GDP growth rate of 3.94 percent. He stated that the growth rate of 9.3 percent of Large Scale Manufacturing (LSM) did not correspond to the fact of reduced electricity generation. Likewise, there was decreasing trend in the wholesale retail trade and transport sectors. Therefore, the projected figures did not seem realistic. The Ministry of Planning, Development & Special Initiative (MoPD&SI) responded that the LSM data was released every month showing double digit growth for several months. No one had ever raised any objection to the figure previously. He further stated that the consumption of electricity had actually increased however the element of subsidy in electricity was reduced, which was reflected as negative in the provisional estimates of GDP. He also stated that the Government allowed economic activity especially in the housing and construction sectors even during Covid-19 lockdown, which resulted in increased demand, and consequently production, of cement. Moreover, various incentives for the agriculture sector like increase of minimum support price of wheat and subsidies for fertilisers also contributed to health of economy. He further stated that the growth of both LSM and GDP was fully supported by credible data.
Secretary to the PM clarified that timely payments to sugarcane farmers helped them to cultivate larger area for wheat, which also had significant impact on positive growth due to bumper crops.
Chief Minister Sindh suggested that the data of poverty and unemployment in the country should also be included in the Annual Plan for better planning. Minister for MoPD&SI and Adviser to the PM on Institutional Reforms & Austerity endorsed the viewpoint.
He stated that FBR's tax collection figures and targets should also be shared with the provinces to enable them to make an effective plan for development. Member NEC from Khyber Pakhtunkhwa recommended simplifying the tax procedures and to offer tax exemptions to industrial sector for growth.
Murad Ali Shah also pointed out that under Article 156 (4) of the Constitution two meetings of the NEC were required to be held every year. Furthermore, meeting of the NEC only few days before the announcement of the annual budget was less useful. Therefore, he suggested that NEC meetings should be held in accordance with the Constitutional requirements. Minister MoPD&SI endorsed his viewpoint and also highlighted that the NEC discusses only federal PSDP, whereas the mandate requires it to deliberate on the national development outlay, which includes provincial budgets and development plans. The Chairman NEC/ Prime Minister observed that certain timelines may be fixed in this regard. The house agreed that first meeting of the NEC may be convened in January and second in May-June every year.
During ensuing discussion, the Chief Minister Sindh contested the PSDP figures and proposed allocation for Sindh. He stated that current allocation was not enough for regional equality and balanced development. Further, projects proposed in the Province are not allied with the provincial priorities and those had been included in the PSDP without consultation with the government of Sindh. He stated that the schemes listed for other provinces are of high magnitude but most of the schemes listed for Sindh are minor and at District/Municipal level. Furthermore, the overall allocation of Sindh had been drastically reduced in the last four years. Chief Minister Sindh, Murad Ali Shah and CM Advisor Nisar Ahmed Khoro in their joint dissenting note, explained the reasons for opposition of development budget for FY 2021-22.
“We are compelled to pen down our dissent since our protests against the Federal Government’s overwhelmingly partisan behaviour towards the people of the province of Sindh, shown in the allocation of Federal PSDP have fallen on deaf ears,” said Murad Ali Shah. The Chief Minister Sindh had earlier written two letters on June 5 and June 6, 2021, detailing the injustices meted out to Sindh. The dissenting note says that both the letters may be made part of this note of dissent and included in the proceedings of NEC.
“We have also expressed our views in the NEC meeting and this note of dissent may be considered as a continuation of our views. Sindh, which generates and contributes 70 percent of Pakistan's revenue, has been largely ignored in the federal PSDP. In the earlier correspondence, Sindh has shared numerous examples of how Sindh has been sidelined in comparison to other provinces. It is evident that the province of Sindh has been discriminated against in the distribution of development funds. Furthermore, there are no new schemes for Sindh in the Communication or Finance Division. There has been no consultation with the Government of Sindh for inclusion of schemes in the Housing & Works Division or the Planning & Development Division.”
Murad Ali Shah, stated since writing the letter of June 5, 2021 the pro-rata allocation to Sindh was further reduced and submitted the following: “In the letter of June 5, 2021, we had expressed our reservations on the meagre allocation given to Sindh in the working paper given in the APCC. We thought that this discrimination would be rectified in the NEC. However, looking at the working paper of the NEC, it is noted that the number of schemes given to Sindh remains at 2, with an allocation of merely Rs1.5 billion. However, when this is compared to other provinces, we see that just in the case of Punjab, the number of schemes is 10 times as many as that of Sindh, and allocation has increased by 136 percent going from 15.06 billion in the APCC to 35.6 billion in the NEC. How is this justified?” he continued.
According to Chief Minister Sindh, another example of the Federal Government's inherent bias against Sindh is the allocation in Communication Division [NHA]. While Punjab which already had an allocation of more than four times that of Sindh in the APCC working paper has gone from Rs32.1 billion to Rs44.5 billion at the stage of NEC. The corresponding increase for Sindh is a mere 7 billion.
“Yet another glaring example is the allocation for Housing. Punjab has seen an allocation increase of 121 percent from the APCC stage to the NEC, while Sindh receives a paltry 19 percent increase. Moreover, no consultation was done with the provincial government and Union Council level schemes were included directly from Islamabad. Is this not indicative of Federal Government's abject bias?” he maintained.
Wrapping up the dissenting note, both the Chief Minister Sindh and Advisor to CM Sindh/ Member NEC, said that given the absolute disregard the federal government has repeatedly shown towards the 'people of Sindh, and its absolute disinterest in addressing the valid grievances of the people of Sindh,’ they have registered their protest to and disapproval of the Federal PSDP in its current form as it does not conform to the Constitutional provision - of Article 156(2) to "ensure balance development and regional equity.”
The Prime Minister of AJ&K highlighted the issue of adverse environmental impact of Neelum Jhelum Project. He stated that the WAPDA Authorities are not resolving the problem despite repeated reminders. The AJ&K Government requested intervention of the Prime Minister of Pakistan in this regard. On query of the chair, Secretary to the Prime Minister clarified that the technical team of WAPDA had already suggested a solution, which was not acceptable to the Government of AJ&K. Therefore, this matter could not be resolved so far. It was observed by the house that Deputy Chairman Planning Commission may have consultations with the Government of AJ&K and other stakeholders for resolution of the issue. It was also noted that the Principal Accounting Officer for AJ&K is the Secretary, Ministry of KA&GB and power should be given to the officers of Government of AJ&K. The Prime Minister of Pakistan directed the Minister PD&SI and the Minister Finance and Revenue to resolve the issue. The Deputy Chairman Planning Commission will hold consultations with Government of AJ&K, Wapda and other stakeholders for resolution of the issue raised by the Prime Minister AJ&K.
Adviser to the Prime Minister on Institutional Reforms and Austerity suggested that inflation target should be given to the State Bank of Pakistan. The Finance Minister of Punjab suggested that the Annual Plan should also focus on food inflation, which was a very important factor to be considered while setting targets for economic growth. He also stated that in order to ensure food security, the provinces may be allowed to import food commodities in defined quantities as per their needs. Therefore, the Federal Ministry of National Food Security & Research may examine possibility of the proposal in consultation with the stakeholders in light of the law of land.
Copyright Business Recorder, 2021