NEC lowers GDP target

Islamabad: The chief ministers of Sindh and Balochistan protested exclusion of certain development projects from the Public Sector Development Programme (PSDP) during the NEC meeting held here with Prime Minister Syed Yousuf Raza Gilani in the chair.

The National Economic Council (NEC) approved an outlay of Rs541 billion for the development programme and lowered the GDP target to 5.5 per cent for the next financial year 2008-09.

Officials, who attended the National Economic Council (NEC) meeting, told The News that Balochistan Chief Minister Nawab Muhammad Aslam Raisani asked the Islamabad authorities to jack up share of the province in accordance with the promise made by the Planning Commission after the Annual Plan Coordination Committee (APCC) meeting.

Sindh Chief Minister Qaim Ali Shah complained about exclusion of Lyari Expressway and Tando Mohammad Khan development projects from the PSDP list for 2008-09, expressing his apprehension that such steps could aggravate the rural-urban tension among inhabitants of the province.

The Lyari Expressway cost escalated owing to resettlement plan, which hiked to Rs8.9 billion against initial estimates of Rs4.6 billion. Although, the federal government has already provided Rs2.9 billion to Sindh as resettlement cost but no amount was allocated in the PSDP for 2008-09.

It is relevant to mention here that President Musharraf had announced Karachi and Hyderabad development plan a few years back. Under the Hyderabad development plan, the Tando Mohammad Khan project was also under way but the Centre did not allocate funds for the same.

Balochistan also identified certain road sector projects which had not been completed after several years. The NEC was told that the contractors could not accomplish their assigned tasks due to some personal problems so they might be changed.

The Balochistan CM also complained about allocating the PSDP share for the province for the next fiscal year to the tune of outgoing fiscal year despite commitments made by the Centre to accommodate them while finalising the annual development plan at the highest economic forum.

When a high-level official at the Planning Commission was contacted for comments, he confirmed that Balochistan and Sindh raised objections during the NEC meeting ignoring the fact that they were major the beneficiaries under vertical arrangements.

The official said the government allocated the same amount for Balochistan for the next fiscal year compared to the outgoing fiscal year keeping in view the fact that Gwadar’s development consumed the major chunk in the ongoing fiscal year and now they will be able to spend the allocations in their set priority areas in the next fiscal year.

Another official at the Planning Commission was of the view that he was quite disappointed to witness confusion on part of decision makers while finalising the annual development plan and macroeconomic indicators for the next financial year.

“There is complete confusion on the part of the government on how it will be going to achieve its envisaged targets,” he added. He said when the NEC was finalising the annual plan for 2008-09, the provinces started voicing for jacking up their shares in the PSDP and all of them were least interested about the future envisaged plan on macroeconomic front for the next financial year.

So the annual plan was approved in such a way that nobody was sure how much GDP growth the government was envisaging vis-a-vis PSDP size for next fiscal year. Inflation target in the PSDP has been forecast at 12 per cent owing to higher POL and food prices for 2008-09. The inflationary target will depend upon budgetary measures being announced by the incumbent regime in next few days.

The NEC also approved Rs34 billion for establishing social safety nets during fiscal 2008-09 to protect vulnerable segments in the wake of rising POL and food prices. Governor State Bank Dr Shamshad Akhtar raised objection