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Pakistan Development Budget 2010-11: Rs 663 Billion Outlay Approved by NEC
Source: brecorder.com
Source Date: Saturday, May 29, 2010
Focus: Institution and HR Management
Country: Pakistan
Created: May 31, 2010

ISLAMABAD (May 29 2010): The National Economic Council (NEC) on Friday approved total development budget outlay of Rs 663 billion-38 percent increase compared to ongoing financial year's development budget, with Gross Domestic Products (GDP) target of 4.5 percent for the upcoming financial year 2010-11. The inflationary target has also been fixed at 9.5 percent.

The NEC, which met with Prime Minister Yousuf Raza Gilani in the chair, approved Rs 280 billion federal share with foreign exchange component of Rs 50 billion-Rs 373 billion provincial share and Rs 10 billion for Erra under Public Sector Development Programme (PSDP) 2010-11. The NEC approved 4.1 percent GDP rate for the ongoing financial year (2009-10).

The sector-wise allocation includes Rs 136 billion for infrastructure, Rs 134 billion for social sector and Rs 10 billion for production. Water sector will receive Rs 35.4 billion, energy Rs 30 billion and Pakistan Electric Power Company (Pepco) will generate Rs 105 billion from its own resources for the power projects. An amount of Rs 70 billion has been earmarked for transport sector, Rs 6 billion for agriculture sector, Rs 21 billion for education sector with Rs 15.2 billion for Higher Education Commission (HEC).

Addressing a joint press conference with Information Minister Qamar Zaman Kaira and Deputy Chairman of Planning Commission Dr Nadeem-ul-Haque, Finance Advisor to Prime Minister on Finance Dr Abdul Hafeez Sheikh said that due to new NFC award and 18th Amendment, the provincial share in development programme had been increased. NEC has also been reconstituted after 18th amendment. The NEC noted that economic recovery and stability would be preserved by keeping monetary policy in line with fiscal discipline.

"NEC has approved 4.1 percent GDP rate for the ongoing financial year and 4.5 percent GDP target for the upcoming financial year 2010-11," Hafeez said, adding that the current financial year PSDP was targeted Rs 604 billion of which actual realisation had been projected at Rs 480 billion. He said that federal share in PSDP for ongoing fiscal year was Rs 300 billion while actual materialisation would be Rs 235 billion. "NEC has approved Rs 280 billion federal share (25 percent more than ongoing financial year PSDP), and Rs 373 billion provincial share--52 percent higher than ongoing financial share in PSDP," he said, adding that the amount of Rs 10 billion has been earmarked for Erra.

Advisor on Finance said that budgeted provincial share for ongoing fiscal year was Rs 294 billion but the actual realisation had been estimated at Rs 245 billion. He said that NEC had also decided to prioritise the projects, and emphasis would be laid on the projects near to completion. "We have decided to make plan according to available resources," he said, adding that portfolio of the projects would be rationalised to achieve results.

He added that NEC had also decided to make automatic quarterly releases of funds to end reliance on Finance Ministry. He further noted that NEC would hold quarterly meetings to review the progress on the projects. "In review meeting, more projects may be added in the development programme," he said, and added that ministries and departments may be able to get more funds also for fast track projects in addition to allocated amount. "Operational and implementation mechanism will be formed within the next two to eight week to evaluate the progress on the projects," he added.

"Regarding the projects, regional disparities on federal as well provincial levels will be narrowed to launch projects in backward areas," he said, adding that there would no cut on funds allocation under PSDP for the next financial year. He said that the government would reduce reliance on domestic borrowing to avoid its effects on inflation. "We will make effort to balance the legitimate credit," he added. The Deputy Chairman of Planning Commission said that NEC had directed to avoid throw-forward programme in future and, as the resources were being shifted to provinces after new NFC award and 18th amendment, the government would complete the process soon to hand over the ongoing projects to the provinces.

"The rate of inflation has been fixed at 9.5 percent; manufacturing at 5.2 to 5.6 percent, services sector at 4.7 percent and agriculture sector at 3.8 percent," he said. He added that for the first time there was no operational shortfall in ongoing financial year's PSDP as it was based on realistic grounds. Kaira said that new team had started process after new NFC award, and the upcoming budget would be the first one after new NFC award and 18th amendment. He said that provinces were going to receive more resources, which would reflect in the budget.
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