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NEC approves Rs541b for public sector development

ISLAMABAD — Pakistan's National Economic Council (NEC) — the highest body on economic decision making — yesterday approved a Rs541 billion Public Sector Development Programme, 11.2 per cent higher than the outgoing year and projected 5.5 per cent GDP growth rate for 2008-09.

The meeting chaired by Prime Minister Syed Yousuf Raza Gilani remained confronted with the issue of "insufficient resources" to fund the new budget, with provinces expressing their concern over receiving less budgetary allocations in the next budget.

Insiders said that Finance Minister Syed Naveed Qamar kept saying that due to the weak kitty position, there could not be no significant increase in the allocations of the ministries and the provinces.

The Governor of State Bank Dr Shamshad Akhtar stressed the need for taking the nation into confidence about the existing "inadequate economic conditions." She termed the increasing fiscal deficit, burgeoning trade and current account deficits and rising inflation as the serious challenges and said that utmost care was required to carve out new economic policies.

Briefing reporters after the meeting, Deputy Chairman Planning Commission Salman Farooqui said of Rs541 billion, the size of the federal PSDP would be 371 billion and that of the provinces Rs170 billion. The allocation for ERRA is Rs27 billion which is over and above the PSDP amount of Rs541 billion.

The social sectors have been allocated Rs188 billion, 12 per cent than the last year.

Infrastructure gets Rs166 billion, power sector Rs14 billion which is over and above Rs51 billion to be spent by WAPDA from its own resources, water sector Rs75 billion; food, agriculture and live stock Rs20 billion; transport and communication sector Rs61 billion, higher education Rs18 billion and special areas of AJK, Northern Areas and FATA Rs23.3 billion. The deputy chairman Planning Commission said the new PSDP aims at providing a comprehensive safety net against severe hardship faced by the poor and overcoming the energy and water crises in a planned and systematic manner. It is also aimed at giving highest priority to the development uplift of Balochistan, NWFP and special areas, reviving growth in agriculture and manufacturing and building up human resources at all levels of education.

The PSDP envisages an income support fund of Rs34 billion to provide cash grants to the poor.

Farooqui said the government is working on a comprehensive package to protect and empower the poor. The package will encompass income support, health protection and skills training for both domestic and overseas employment. It will also empower women and includes Prime Minister's special initiatives in employment and skills development, rural development, health sector, housing and improving governance.

Also, Rs2 billion have been earmarked for Hunarmand Pakistan Programme, Rs10 million for establishment of Placement Bureaus throughout Pakistan, Rs500 million each for white revolution and village product specialisation, Rs10 million for cold chains, Rs3.5 billion per year for doubling lady health workers and Rs500 million for expansion and upgradation of basic health units.

A Housing for 'All Programme' is also being launched establishing a revolving fund of Rs10 billion while a Real Estate Investment Trust is to be set up at cost of Rs300 million. The PSDP envisages Rs100 million for promoting paperless governance and video conferencing facilities.

The deputy chairman Planning Commission said the new government is setting up an integrated Thar Coal Development Board headed by Chief Minister Sindh in a fortnight and an institutional round table on Thar coal is planned to be held in Washington DC by the end of the next month. This will be followed by road shows before mining and power generation contracts are awarded through public bidding.

On the direction of the prime minister, a National Programme of Small Dams is being launched at a cost of Rs54 billion. The initiative will provide two million acre additional water to irrigate about four hundred and twenty-five thousand acres of land by constructing 314 small dams in the country.

An employment commission would be established to provide employment to one person from each poor family of 50 per cent of the district of the country. An allocation of Rs2 billion has been provided for vocational training and skill development. Phase-II of the Gwadar Port will be implemented involving construction of ten more berths and road and rail link with the national network. Rs10 million has been earmarked for carrying out feasibility study for development of Keti Bunder Port.