Meeting of the National Economic Council: Govt will decide on dams soon: NEC
* Public sector development allocation to reach Rs 604 billion in 2009-10
* GDP growth to rise to 8 percent
By Khalid Mustafa
ISLAMABAD: Pakistan’s GDP growth rate will reach eight percent by 2009-10 and Public Sector Development Programme (PSDP) allocation then will rise from the current Rs 202 billion to Rs 604 billion, according to projections in the working draft of the Medium Term Development Framework (MTDF).
The draft states that the government will spend Rs 2.09 trillion on PSDP from 2005 to 2010.
The projections were unveiled during the meeting of the National Economic Council (NEC) which was chaired by Prime Minister Shaukat Aziz on Thursday. The meeting was convened to review ongoing projects under PSDP 2004-05, economic indicators and future strategy to increase GDP growth, developing infrastructure and increasing energy and water resources.
Dr Akram Sheikh, deputy chairman of the Planning Division, told reporters after the meeting that the division had made a plan under the proposed working paper of MTDF for 2005-10, to provide a strong foundation for sustainable growth of the country’s economy. He said the proposed MTDF draft had been sent to the government departments and other stakeholders for their feedback. He said it would be presented at the next NEC meeting in May for final approval before the next budget.
He said the meeting decided to make Pakistan a “fair economic society” by bringing less developed areas at par with developed ones.
Dr Sheikh said that under the proposed draft, total investment would rise from Rs 1.2 trillion in 2004-05 to Rs 8.8 trillion in 2009-10 and national savings would rise from Rs 1.1 trillion to Rs 8 trillion.
He said that from 2005 to 2010, the total allocation for PSDP would be Rs 2.09 trillion. He said tax revenue would go up from 10.7 percent of GDP to 11.8 percent of GDP and fiscal deficit would decline from 3.7 percent to 3.2 percent. He said inflation would be kept around 6 percent. Dr Sheikh said exports would increase from $13.7 billion in 2004-05 to $23.5 billion in 2009-10.
He said that it was decided in the meeting that the government would soon decide on water reservoirs for increasing water storage capacity. He said water availability would be increased by 14.67 million acre feet (MAF) by conservation and augmentation. He said only the water strategy was discussed in the meeting, not the Kalabagh and Basha dams. He also said there had been no discussion on the 6th National Finance Award.
About the energy sector, Dr Sheikh said the current energy mix included 30 percent oil, 50 percent natural gas, 6.5 percent coal, 12.7 percent hydropower and 0.8 percent nuclear power. He said that by 2010, the target was to reduce the share of oil and gas to 26 percent and 49 percent respectively. The share of coal would be increased to 9 percent, hydropower to 13.9 percent, renewable to one percent and nuclear power to 0.9 percent.
He said that according to the MTDF draft, the government would give priority to development of water, energy resources, and infrastructure. Dr Sheikh said that during a six-month period, the government released Rs 44.4 billion out of its allocated Rs 112 billion for the whole year. Of this Rs 44.4 billion, Rs 36.2 billion was utilised in the implementation of projects under PSDP 2004-05. This 81 percent utilisation, he said, was a marked improvement over the 70 percent of last year.
He said that during the next five years, the government would spend an estimated Rs 113 billion on infrastructure, Rs 655 billion on social sectors, Rs 240 billion for regional development and Rs 60.6 billion for providing supplementary facility to various industries to help them increase output.