ISLAMABAD: Adding about 300 new federal projects to the portfolio, the National Economic Council (NEC) on Wednesday approved a consolidated national development programme for the next fiscal year envisaging Rs1.837 trillion investments and four per cent economic growth rate.

The NEC meeting, which was presided over by Prime Minister Imran Khan and attended by all the chief ministers as well as the prime minister of Azad Jammu and Kashmir, also cleared in principle the 12th five-year plan (2018-23) that forecasts 6.5pc economic growth rate by terminal year i.e. 2023 while mainly relying on the acceleration of the China-Pakistan Economic Corridor’s second phase.

The council was explained that the next year’s growth target of 4pc was based on sectoral growth of agriculture 3.5pc, industry 2.2pc and services sector 4.8pc. The targets, based on the government’s stabilisation programme and on ground situation, were realistic yet ambitious, the meeting was informed.

While the 4pc growth would represent a marked slowdown from growth rates above 5pc in the previous two years, it is still well above the IMF’s own forecast of 2.8pc next year.

The meeting approved the National Development Outlay 2019-20 amounting to Rs1.837 trillion, including Rs925bn federal public sector development programme (PSDP) and Rs912bn provincial annual development plans (ADPs).

NEC clears 12th five-year plan in principle; sets economic growth rate at 4pc in 2019-20

Of the total Rs925bn federal PSDP, the core PSDP would involve Rs575bn federal programme including a foreign exchange component of Rs127bn, it was said. This would also include Rs295bn projects of the federal ministries, Rs189bn projects of National Highway Authority, Wapda and power sector. About Rs90bn in corporation’s projects would come from foreign sources, mostly from China, the council was informed.

According to the sources privy to the NEC meeting, special areas of Azad Jammu and Kashmir and Gilgit-Baltistan will have Rs40bn federal projects during the next fiscal year, while Rs24bn will be spent on merged (Fata) districts of Khyber Pakhtunkhwa and Rs13bn on the Knowledge Economy Initiatives.

About Rs100bn will be administered by the finance ministry for special development programme for internally displaced persons (IDPs) and security enhancement at the rate of Rs32.5bn each while Rs10bn will be spent on the PM’s youth skills development programme and Rs2bn for tree plantation. Another Rs22bn has been allocated for the merged districts of KP under 10-year special development plan. As such, these districts will get a total of Rs46bn in development during the next fiscal year.

The federal PSDP also includes about Rs250bn worth of alternative funding to be raised through public-private partnership for which the project land will be provided by the government as equity and the private sector will make investments on a Build, Operate and Transfer (BOT) basis or a rental basis. Some of the 10 key projects identified under this scheme include Sukkur-Hyderabad and Sambrial-Kharyan motorways, Shahdra Flyover Lahore, Kharyan-Rawalpindi dual carriageway and Nullah Leh Corridor, Rawalpindi.

In terms of sector-wise allocation, about 64.5pc or Rs371bn of the Rs575 federal PSDP has been allocated to infrastructure. This included about Rs80bn for the energy sector, Rs200bn for transport and communications, Rs70bn for water, and Rs21bn for planning and housing.

About Rs93bn (16pc of the federal PSDP) have been earmarked for the social sector and remaining for the AJK, GB, merged districts of KP and industries and food etc.

An official said about 295 development projects had reached completion stage during the current financial year while about 300 more projects were added to the programme by the new government. Thus, the total number of development projects in the PSDP stood at about 950, he added.

The meeting was informed that about 90pc of Rs675bn allocations for PSDP during the current year had been released till May 25, while remaining 10pc would be disbursed during the month of June.

It was further reported that about 391 unapproved projects in the PSDP worth Rs1.89trillion were deleted during the current year that had reduced the throw forward from Rs6.4tr to about Rs4.4tr.

The NEC confirmed extension in powers of special forum for rehabilitation and reconstruction in erstwhile Fata till December 2019. The special forum, under the chairmanship of 11 Corps Commander, was established by the NEC on May 30, 2016 for a period of two years for fast-track implementation mechanism for rehabilitation and reconstruction in erstwhile Fata.

The NEC also approved a procedure for approval of Programme for Results (PforR), Development Policy Credits (DPCs) and Financial Intermediation Programmes (FIPs).

A programme for social safety framework, including Ehsas and nutrition, was withdrawn by the planning commission at the last moment in view of the creation of a new ministry on social sector that would go through the plan developed by the planning commission and resubmit it in line with its own vision.

Prime Minister Khan told the meeting that the country was facing unprecedented economic crisis and joint efforts of the federal and provincial governments were needed to solve the crisis. He said the government had introduced local government systems in Punjab and Khyber Pakhtunkhwa to ensure people’s empowerment at the grassroots level and to afford them an opportunity to play their part in development process.

The premier reiterated his call to the provinces to allocate necessary financial resources, as per the commitments made earlier, for the development of erstwhile Fata. A statement said the 12th five-year plan (2018-23) would be based on a few cross-cutting themes.

Published in Dawn, May 30th, 2019