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NEC to unveil budget targets on June 3

NEC to unveil budget targets on June 3

ISLAMABAD: The federal government has called the meetings of the Annual Planning Coordination Committee (APCC) and National Economic Council (NEC) on June 2 and 3, respectively, to finalise the development programme and set targets for the macroeconomic indicators for 2023-24.

The 13-member NEC led by Prime Minister Shehbaz Sharif is the country’s highest forum of the federation on economic decision-making. It also includes four federal ministers – Ishaq Dar & Ahsan Iqbal of PMLN, Syed Naveed Qamar of PPP and Asad Mahmood of JUIF. Eight provincial members of the council include four chief ministers besi­des Punjab’s minister for energy S.M. Tanveer, Sindh Senator Nisar Khuhro, KP’s adviser energy Himayatullah Khan and Balochistan’s finance minister Noor Muhammad Dummar.

The APCC led by federal minister for planning and development Ahsan Iqbal and comprising provincial ministers for finance and development would review the development activities during the current fiscal year that was marred by diversion of funds from various infrastructure projects to discretionary spending on smaller schemes recommended by the parliamentarians, financial cuts amid growing fiscal deficit and a struggling IMF programme.

It would also firm up the next year’s development programme that could touch Rs1tr despite just Rs900bn ceiling indicated by the Ministry of Finance and would also review macroeconomic indicators for the outgoing year and recommend to the NEC the sectoral targets for the next fiscal year, envisaging little over 3pc growth rate against a dismal performance of just 0.3pc of GDP during the current fiscal year. The provinces would indicate their development targets for the next year to the APCC and the NEC.

Rs1tr allocation likely for PSDP

The sources said a couple of pre-APCC meetings and consultative sessions between the ministries of finance and planning had been scheduled over the next couple of days including over the weekend. The Economic Survey 2022-23 is tentatively scheduled for June 8 to be followed by an announcement of the federal budget on June 9.

Beginning June 12, the caretaker provincial governments would separately announce their respective budget.

The date for the announcement of the federal budget on June 9 has been kept unchanged so far, according to official sources who attributed the delays to the still pouring in of the production data of key components of the gross domestic product (GDP) and its cascading impact on the line up of other high profile meetings of the federal and provincial governments.

The budget schedule, these sources said, was finalised following the repeatedly rescheduled meeting of the National Accounts Committee that calculated the GDP growth rate at dismal rate of 0.29pc for the current fiscal year (FY2022-23).

Mainly because of the national accounts, all other budget-related events got delayed. The Budget Strategy Paper (BSP) was earlier lined up for approval by the federal cabinet in the week ending May 19 but rescheduled during the current week but had to be postponed again to the next week – just ahead of meetings of the APCC and NEC.

BSP has to set the final direction of the next year’s budget based on performance of the economy in the current year.

The official said the APCC and NEC were expected to finalise about Rs900-1,000bn of federal Public Sector Development Programme but this would include a traditional PSDP of Rs700bn for next year compared to Rs727bn allocation for the current year. Even the Rs700bn would include federal resources of about Rs600bn besides about Rs100bn worth of foreign-funded projects. In addition, about Rs200bn is estimated for the viability gap fund (VGF) to be funded through public-private partnerships. This would be finalised over the next week through a series of priority committee meetings to be spearheaded by the secretaries of finance and planning with other ministries and divisions.

Published in Dawn, May 26th, 2023

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