NEC Approves Rs3.8 Trillion PSDP to Accelerate Economic Growth

NEC Approves Rs 3.8 Trillion PSDP to Accelerate Economic Growth - ahgroup-pk

ISLAMABAD: The National Economic Council (NEC) decided on Monday to Continue funding constituency-based schemes and ongoing provincial projects, and have approved a massive development plan worth Rs3.792 trillion.

The plan focuses on funding local projects, including constituency schemes and ongoing provincial initiatives.

The expansionary public investment stance will likely come under tight scrutiny of the International Monetary Fund (IMF) as the authorities continue negotiations for a $6-8bn bailout for over three years.

Under the new plan, funding for public projects will substantially increase, with the federal Public Sector Development Programme (PSDP) seeing a 47% boost to Rs1.4 trillion. This increase is even more significant when public-private partnership (PPP) projects are included, bringing the total to Rs1.5 trillion. Additionally, state-owned entities will invest Rs197 billion in development activities, totalling Rs1.696 trillion.

Presided over by Prime Minister Shehbaz Sharif, the four-hour-long NEC meeting approved more than 47pc increase in the federal Public Sector Development. Programme (PSDP) to Rs1.4tr compared to the current year`s Rs950bn

The federal development programme increases by 58pc or Rs1.5tr if another Rs100bn public-private partnership (PPP) projects are included.

Another Rs197bn investment would be made by state-owned entities in development activities, taking the total to Rs1.696tr.

The NEC approved their cumulative annual development plans worth Rs2.095 trillion and agreed to continue funding the ongoing high-priority provincial projects with over 80 completion status with a reciprocal view to discourage such projects from reaching the federal budget future.

Social sector allocation was enhanced to Rs280bn instead of Rs83bn cleared by the APCC. Higher education was the primary beneficiary, as its allocation was increased to Rs93bn instead of just Rs32bn recommended by the APCC. Particular areas like AJK, GB, and merged tribal districts also gained through their interactions post-APCC meeting, as the share of AJK GB was increased to Rs75bn from Rs51bn and that of the merged districts to Rs64 bn from Rs57bn.

The Rs1.4tr total federal PSDP would also include foreign financing of Rs316bn.

The growth target for next year has been set at 3.6pc, supported by 2pc growth in agriculture, 4.4pc growth in the industrial sector, and 4.1pc growth in services.

The Planning Commission said;

The growth prospects are subject to `political stability, exchange rate

stability on the back of improvement in external account and external inflows, macroeconomic stabilisation under IMF`s programme and expected fall in global oil and commodity prices.

The total investment-to-GDP ratio is expected to increase from 13.1pc in 2023-24 to 14.2pc in 2024-25 due to expected economic turnout, improved business environment and political stability.

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