GDP growth projected 3.7pc

Ishfaq A Mughal

The Annual Plan Coordination Committee (APCC) projected 3.7 percent GDP growth during the current fiscal year.

The APCC met under the Chairmanship of Dr. Nadeem ul Haq, Deputy Chairman, Planning Commission. All federal Secretaries of the Ministries/Divisions, Governor Khyber PakhtunKhwa (representing FATA), representatives of all four provinces, AKJ and Gilgit Baltistan, participated in the meeting.

Deputy Chairman, Planning Commission welcome the participants and invited them to put their heads together and think how to achieve sustainable growth. He also underlined low investment and asked the participants to suggest practical measures for enhancing investment.

Review of Annual Plan 2011-12 and proposed Annual Plan 2012-13 was presented by Mr. Sohail Rehan,  Joint Chief Economist, Planning and Development Division. The APCC was informed that performance during the current fiscal year was satisfactory. The GDP growth is expected to be 3.7% as against 3% achieved during the last year. Despite floods, the Agriculture sector has performed better and major crops including cotton, rice, maize, and sugarcane witnessed sizable growth over the last year. The Wheat crop, however, is expected to be around 23.2 million tons, which is 2 million tons less than the last year production.

The APCC was also informed that CPI and food inflation are easing down. The CPI inflation is expected to be around 11 percent during the year as against 13.7 % during the previous year. Similarly, food inflation has witnessed a big reduction from 18 % in the last year to 11.5 % in the current year. The large-scale manufacturing has shown some improvement. The external sector, especially export is expected to be behind target, while worker remittances have shown positive growth.

The APCC was informed that the next year plan envisages a GDP target of 4.3% which has been fixed under the Growth Strategy. The targets will be achieved through  improvement in productivity and competitiveness, reforms in the markets, promoting cities as regional clusters, improve connectivity, reforming the civil service, institutions and PSEs, harnessing the potential of youth and embarking on result based management.

While reviewing PSDP 2011-12, it was informed that no reduction in current year’s PSDP size was made to help restore GDP growth. As such, the National Development Outlays 2011-12 remained at Rs. 730 Billion. It was further informed that: 

·         Foreign assistance increased than the budgeted allocation (i.e. from Rs. 39 Billion to Rs.90 Billion).

·         Releases to the executing agencies have been more streamlined in the CFY so as to reach the project authorities on a fast track basis. So far, 91% of the PSDP allocations have been released.

·         Emphasis was placed on timely completion of projects by making special efforts.

·         About 174 projects would likely to be completed during CFY.

            Regarding proposed PSDP 2012-13, it was informed that it has been prepared in line with the growth strategy framework and to achieve Government’s nine points agenda to ensure inclusive growth, reducing poverty, achieving MDGs, minimizing wastages, ensuring balanced development, food, water and energy security. The proposed PSDP 2012-13 also articulates the division of subjects between Provincial and Federal Governments after passage of Constitutional 18^th Amendment.

            The salient features of the proposed PSDP 2012-13 are as under:

·      Total National Development Outlays 2012-13 would be Rs. 825.2 Billion, wherein Federal PSDP would amount to Rs. 350.2 Billion.

·      Ministries/Divisions have formulated their own development priorities while remaining in their approved ceilings and adopting guidelines of the Planning Commission and Finance Division.

·      Emphasis has been placed on completion of on-going priority projects during 2012-13.

·      New un-approved projects were discouraged as they may cause thin spread resource allocation resulting in time/cost overrun.

·  It was ensured that Foreign Assistance is not underestimated. In the total proposed PSDP 2012-13, the size of FA has been estimated at Rs.120Billion.

·     New schemes for capacity building or for construction of housing and devolved subject’s projects have been excluded.