Prime Minister Nawaz Sharif Monday chaired back-to-back National Economic Council (NEC) and federal Cabinet from London through video link – first-ever in the history of the country – to approve development outlay of Rs 1675 billion and a growth target of 5.7 percent as well as federal budget of around Rs 4.418 trillion for the next fiscal year.
Sources said the proposed expenditure ceiling presented to the federal cabinet for approval was Rs 860 billion for defence expenditure for the next fiscal year, Rs 1354 billion for mark-up as well as Rs 245 billion for pension and Rs 348 billion for federal government services.
The government said to have allocated Rs 169 billion for subsidies, Rs 40 billion grants to provinces, Rs 542 billion grants other than to the provinces as well as Rs 800 billion federal PSDP and Rs 60 billion net lending.
Presiding over two meetings from Pakistan High Commission London, where Prime Minister has been advised to have an open heart surgery today (Tuesday), he directed Finance Minister to make sure that farmers are given a special package in the budget and prices of urea are reduced.
He said farmers have suffered losses due to a drop in commodities prices in the international market. The Prime Minister further stated the government policies have increased investors’ faith and improved overall security situation in the country. He said foreign exchanges reserves have increased to over $21 billion in 2016 from $.7.6 billion in 2014 and present government has prepared its fourth budget.
“Pakistan in on the path to growth with 4 percent GDP during the last three years and 4.7 percent in the current fiscal year, highest during the last eight year,” he said adding the China Pakistan Economic Corridor (CPEC) would also contribute to growth and special Economic Zones (SEZs) to be set up at the route would also attract foreign and local investment.
Sources said ahead of the NEC meeting, Minister for Planning, Development and Reforms Ahsan Iqbal held a series of day-long meetings with representatives of smaller provinces to allay their concerns and assured them that their projects would also be accommodated in federal development budget.
Finance Minister for Khyber Pakhtunkhwah as well as Sindh Chief Ministers had serious reservation that federal development spending for the next fiscal year was Punjab-centric and that their provinces were ignored.
The NEC approved a consolidated development outlay of Rs 1675 billion and set a target of 5.7 percent for GDP growth and Rs 1675 billion Public Sector Development Programme with Rs 800 billion of federal and Rs 875 billion of the provinces to be utilised from annual development plan of the provinces.
The meeting also set a 6 percent inflation target for the next fiscal year, 17.7 percent investment and 16.3 percent national saving. The government also fixed a target of 1.5 percent foreign saving, (external resources inflows (net), largely borrowing).
The participants of the meeting including chief ministers of the provinces have expressed good wishes for the prime minister. The budget outlay for the next fiscal year was stated to Rs 4.5 trillion, a tax collection target of over Rs 3600 billion and a 3.8 percent fiscal deficit. –Business Recorder