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The National Economic Council (NEC) has approved 4 percent GDP growth and development outlay of Rs 1.837 billion for the next fiscal year with Rs 925 billion federal component and provincial component of Rs 912 billion. A meeting of the NEC chaired by Prime Minister Imran Khan and attended by Chief Ministers, AJP Prime Minister and Chief Minister Gilgit-Baltistan set GDP growth target of 4% with sectoral contribution growth by agriculture, 3.5%, 2.2% by industry and 4.8% by services sector for financial year 2019-20.
Sources said that Sindh province has raised some concerns over federal funded development projects in Sindh. Ministry of Planning and Development is engaged with Sindh and other provinces to address their concerns. Secretary Ministry of Planning and Development Zafar Hassan said that NEC meeting also decided to extend the date of the forum created in 2016 for fast track approval of development schemes for erstwhile Federally Administered Tribal Areas and NEC has extended the extension date of the forum till December 2019.
He added that the NEC has also approved some changes in the composition of the forum with replacement of FATA secretariat secretary and chief engineers with chief secretary and chief engineer KP.
They added that the main pillars of next five-year plan are balance and equitable regional development and sustainable inclusive job-led development with taking the GDP growth from 4 percent for the next fiscal year to 6.5 percent by the end of five years. The GDP growth target of 6.5 percent is not final and could be higher if China-Pakistan Economic Corridor picks up. The plan envisages average inflation of 6.5 percent for the next five years.
They added that national economic protection framework was withdrawn and has been referred to the concerned ministry and it would be placed before the NEC after the input of the ministry is included. The government, sources said, also identified 10 projects to be initially implemented under the Public Private Partnership (PPP) at estimated Rs 250 billion. These projects of Rs 250 billion to be undertaken under PPP mode included Shahdra Flyover, Sambrial-Kharian Motorway, dual motorway Kharian-Rawalpindi and Nallah-Lai Rawalpindi. The ministries and divisions have also been asked to identify the projects for PPP mode. Sources said that acquisition of land would be the government equity under PPP mode.
The meeting reviewed and approved draft 12th Five Year Plan (2018-23) in principle that envisages main themes of balanced and equitable regional development; sustainable, inclusive, job-creating export-led growth; resource mobilisation and improving governance; improving social protection; ensuring food and water security, enhancing connectivity, promoting knowledge economy and Clean and Green Pakistan. The meeting decided that the plan will be further fine-tuned, especially its implementation mechanism, in consultation with all stakeholders.
The meeting reviewed Public Sector Development Programme (PSDP) 2018-19 and the proposed PSDP 2019-20 with focus on new initiatives in the field of agriculture, information technology, higher education, science and technology and technical education and training.
The meeting was informed that targeted interventions will be made in the less developed districts of the country to bring them at par with other parts of the country for regional equalisation. Some of the major priority areas of the PSDP next fiscal year included ten billion Tsunami Tree Programme, Prime Minister's Youth Skill Development Initiative, rehabilitation of affected population residing along Line of Control, construction of Gilgit-Shandur-Chitral Road and improvement of sewerage and sanitation system of Gilgit, and development of merged districts of Khyber Pakhtunkhwa. The meeting approved National Development Outlay 2019-20 amounting to Rs 1.837 trillion including Federal PSDP and Provincial ADPs.
Sources said that a target has been set to complete 295 development schemes from next fiscal year PSDP allocation while total ongoing schemes after PSDP rationalisation are 295 and around 300 are expected to the included in the current fiscal year.
Progress report of CDWP and ECNEC from 1st April 2018 to 31st March 2019 was laid before the National Economic Council. The NEC confirmed extension in powers of Special Forum for Rehabilitation and Reconstruction in FATA (erstwhile) till December 2019. The Special Forum, under the Chairmanship of Commander 11 Corps, was established by the NEC on 30.05.2016 for a period of two years for fast track implementation mechanism for rehabilitation and reconstruction in erstwhile FATA.
The meeting approved establishment of Islamabad Development Working Party headed by the chief commissioner ICT including representatives from ministries of finance, planning and other concerned offices. The IDWP will be allowed to approve development project up to Rs 60 million.
The NEC approved procedure for approval of Programme for Results (PforR), Development Policy Credits (DPCs) and Financial Intermediation Programmes (FIPs). The Prime Minister during the meeting said that the country is facing unprecedented economic crisis. He said that joint efforts of the federal government and the provincial governments are needed to overcome the present economic crisis.
The Prime Minister said that the government has introduced local government systems in Punjab and Khyber Pakhtunkhwa to ensure empowerment of the people at grassroots level and to afford them an opportunity to play their part in their developmental process. The Prime Minister reiterated his call to the provinces to allocate necessary financial resources, as per the commitments made earlier, for the development of erstwhile FATA.
The meeting was attended by Adviser to the Prime Minister on Finance Dr Abdul Hafeez Sheikh, Planning Minister Makhdoom Khusru Bakhtyar, Adviser Commerce Abdul Razzak Dawood, Governor KP Shah Farman, Chief Minister Punjab Sardar Usman Buzdar, Chief Minister Sindh Syed Murad Ali Shah, Chief Minister Khyber Pakhtunkhwa Mehmood Khan, Chief Minister Balochistan Jam Kamal Khan, Finance Minister Punjab Makhdoom Hashim Jawan Bakht, Nisar Ahmed Khuhro, Naheed S Durrani, Finance Minister KP Taimur Saleem Khagra, Jan Muhammad Jamali, PM Azad Jammu & Kashmir Raja Farooq Haider, Chief Minister Gilgit-Baltistan Hafiz Hafiz-ur-Rehman and others.
Reuters adds: The de facto finance minister, Hafeez Shaikh, is due to present the budget in parliament on June 11 and has already indicated it is likely to raise taxes and squeeze spending to meet the expected terms of the draft IMF bailout accord.
Khan's government came to office last year facing an imminent balance of payments crisis and a ballooning budget deficit that forced it to seek Pakistan's 13th IMF bailout since the late 1980s.
The IMF agreement reached earlier this month still requires approval from the Fund's board in Washington but it has already stipulated that Pakistan must take painful measures to cut a fiscal deficit expected to top 7% of gross domestic product.
Under the accord, Pakistan agreed to cut its primary budget deficit - not including interest payments - to 0.6% of GDP from a currently forecast 2.2%. With an economy of some $315 billion, that implies finding some $5 billion in extra revenue or spending cuts.
On Saturday, Shaikh said he was preparing a belt-tightening budget to tame the fiscal deficit, adding that both civilian and military leaders agreed austerity measures were needed to stabilise the economy.

Copyright Business Recorder, 2019

Copyright Reuters, 2019

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