PM praises provinces’ support as NEC approves Rs3.66tr development outlay

ISLAMABAD: Prime Minister Shehbaz Sharif on Wednesday commended the provinces for cooperating with the federal government in tackling economic difficulties, telling a meeting of the National Economic Council (NEC) that Pakistan had attained macroeconomic stability through collective efforts.

Addressing the council, the prime minister said the federal government had taken decisions as a team in what it considered the country’s best interest. He said the economy had faced major challenges but had still reached macroeconomic stability.

The prime minister said the regional situation had sharply pushed up oil prices and added that the government had provided Rs128 billion in relief to the public on fuel prices. He said that while petrol stations in several countries had seen long queues, timely steps had ensured uninterrupted fuel availability for consumers in Pakistan.

Shehbaz Sharif also acknowledged what he described as the full cooperation of provincial governments in responding to economic pressures. He said the centre had remained in consultation with the provinces for several weeks ahead of the upcoming budget and that these discussions had also covered ways to generate additional resources, which he described as a key government priority.

Referring to the International Monetary Fund programme, the prime minister said the government had sought to stay committed to it despite multiple challenges. He also said the government had tried to meet public expectations and stressed that the progress achieved had been the result of teamwork.

He added that making resources available for defence in the next budget was a priority and said additional allocations were needed to confront the challenge of terrorism.

In his remarks to the meeting, the prime minister said:

We made decisions in the best interest of Pakistan as a team,

Development budget and growth targets approved

Briefing the meeting on budget proposals and broad macroeconomic indicators, Planning Minister Ahsan Iqbal said the NEC had approved a Rs3.66 trillion national development budget for the next fiscal year and set a GDP growth target of 4%.

He said the federal development allocation had been fixed at Rs1 trillion, while provincial development spending was set at Rs2.21 trillion. A further Rs451 billion was earmarked for federal enterprises.

Iqbal also said the council had approved the planning ministry’s proposal to hold NEC meetings every quarter.

According to the planning minister, the Public Sector Development Programme (PSDP) had fallen from 2.6% of GDP in 2018 to 0.6%. He said Pakistan needed what he termed a development emergency to speed up economic expansion. He added that 74% of government revenue was being consumed by debt servicing and said the country’s largest economic challenge remained the external sector.

In this context, Iqbal said:

We will have to increase foreign investment and exports,

He said the growth target for agriculture had been set at 3.6%, for industry at 4.5% and for services at 4.2%. He added that the inflation target was fixed at 8.2% and said water security had been identified as the country’s top priority.

The planning minister also reiterated that under the Rs1 trillion federal PSDP, no new schemes would be launched except those related to education and defence.