— Rs 800 billion approved for federal PSDP outlay
ISLAMABAD: The Annual Plan Coordination Committee (APCC) on Saturday approved the national development outlay at Rs 2184 billion for the upcoming fiscal year 2022-23 against the outlay of Rs 2135 billion set for the outgoing financial year.
The important forum has also approved outlay of Rs 800 billion for federal Public Sector Development Program (PSDP). The provincial share in the development outlay would be Rs 1384 billion.
As per details, the total development budget of the country for next fiscal year is included Rs 346 billion of foreign funding out of which the provinces would arrange Rs 276 billion from foreign sources and remaining Rs 70 billion would be arranged by the center.
At least Rs 373 billion have been allocated for various division and ministries during the next fiscal year while for projects of WAPDA and NHA at least Rs 121 billion have been fixed.
For AJK and Gilgit Baltistan Rs 95 billion have been allocated in the total development outlay while Rs 50 billion is fixed for merged districts of Khyber Pakhtunkhwa.
As per the details Rs 585 billion have been allocated for development projects in Punjab whereas Rs 355 billion would be spent on development projects in Sindh during the next fiscal year. Rs 300 billion have been fixed for projects in KP while Rs 143 billion has been allocated for Balochistan.
The approved development outlay would now be placed before the National Economic Council (NEC) for approval, which is expected to meet in the next few days.
During the meeting of APCC minister for Planning highlighted that the government inherited economy with formidable challenges as this is the first year in the history of the country when zero releases are made in the last quarter of the year because of the paucity of resources.
As a statement issued by the ministry, taking cognizance of extremely difficult external and domestic environment, we will optimize resources to enhance the job creating ability of the economy and our government is focusing on optimizing job creation in the economy. The Minister reemphasized that primary focus of our development framework is the social sector, water security, agriculture, climate change, knowledge economy and regional equalization to harness optimum potential of the economy. We have started our engagement with development partners and investors who are also keen to invest in our key priority areas.
Joint Chief Economist-Economic Policy (JCE -EP) also apprised the meeting about developments on economic indicators against targets envisaged in the Annual Plan 2021-22. During 2021-22 aggregate demand pressures remained strong as reflected through sale of durables, higher imports of consumables and credit uptick for the private sector. Credit to private sector reached its highest ever level. This increase in demand was mainly due to good financing terms offered by banks and rising incomes during the period.
JCE-EP highlighted that with the likely resumption of IMF program, the economic outlook for the next fiscal year 2022-23 is expected to result in orderly rebalancing between imperatives of economic growth and addressing the external sector vulnerabilities; particularly in the light of extent of global slowdown and the expected abatement of global inflation in commodity prices and the stability of exchange rate movements.
Fiscal adjustment efforts, addressing worsening trade balance, mitigating political and economic uncertainty will result in slowdown in economic growth. Keeping in view external and local uncertain economic environment, GDP growth will slightly taper off and is envisaged at 5 percent for 2022-23. Investment will also be moderated because of fiscal and current account compression. Inflation will stay in double digit as global inflationary pressures will not taper off very quickly.
The targeted 5.0 percent growth for 2022-23 is anchored upon ensuring quality growth without triggering fiscal and external sector imbalances. Both the SBP and the Ministry of Finance endorsed this growth outlook.
The meeting of APCC was held under chairmanship of Minister/Deputy Chairman, Planning Commission on 4th May 2022. The meeting was attended by officials of provincial governments, SBP and federal ministries. Deputy Chairman elaborated that APCC is the curtain raiser of the budget approval process. Although formal and informal consultations on development framework is a continuous process throughout the year, APCC is the highest forum for consultation on development framework before start of approval process.
