APCC approved the national development budget of 4.1 thousand billion rupees
ISLAMABAD: The Annual Plan Coordination Committee has approved a federal development budget worth Rs 1,000 billion for the next fiscal year 2025-26, setting an economic growth target of 4.2 percent and other important economic targets.
Now, this week, the PSDP will be presented for final approval in the National Economic Council meeting chaired by the Prime Minister, after which it will be presented in the parliament along with the federal budget.
The Annual Plan Coordination Committee met under the chairmanship of Federal Minister Ahsan Iqbal. The APCC approved a national development budget of Rs 4.1 thousand billion, of which Rs 2.8 thousand billion will be spent from the financial resources available with the four provinces.
However, despite the severe shortage of resources, the Sindh government received a share of Rs 86 billion from the Federal Development Program (PSDP). According to a federal minister, the PPP took advantage of being an ally of the government, whose support the government needs to approve the budget.
Despite India’s threat to cut water, the government has proposed a 45 percent or Rs 119 billion reduction in the water sector budget to just Rs 140 billion. The export target is $35 billion and remittances from overseas Pakistanis are expected to be $39 billion.
According to sources, Rs 1,000 billion is planned to be spent on development projects. The provinces will spend Rs 609 billion more than in the current fiscal year. The federal government will borrow Rs 270 billion from abroad for development projects, in addition to which the four provinces will also borrow Rs 802 billion from abroad. The Punjab government will spend Rs 1,190 billion on development projects.
The Sindh government has prepared a development program of Rs 887 billion, Khyber Pakhtunkhwa plans to spend Rs 440 billion, while the Balochistan government will spend Rs 280 billion on development projects next year. The economic growth rate target for the next fiscal year is proposed to be 4.2 percent.
The meeting was informed that the economic growth rate this year was 2.68 percent against the target of 3.6 percent. It is proposed to set the inflation target at 7.5 percent in the next financial year. The target for the development of the agricultural sector will be set at 4.5 percent. It is proposed to set the target for important crops including wheat and rice at 6.7 percent. Similarly, the target for cotton ginning is likely to be set at seven percent, and the target for livestock is likely to be set at 4.2 percent.
The target for the industrial sector is proposed to be 4.4 percent, the target for large industries is 3.5 percent, and the target for mining is 3 percent. The target for electricity, gas and water supply is likely to be set at 3.5 percent. Sources said that next year, the growth rate of the construction sector will be 3.8 percent, the target for the development of the services sector will be 4 percent, national savings will be 14.3 percent, GDP in terms of investment will be 14.7 percent, and the target for the current account deficit will be 0.4 percent.
The public investment target is 3.2 percent and the private investment target is 9.8 percent. According to sources, NHA will get Rs 228 billion, Power Division Rs 104 billion, Water Resources Division Rs 140 billion, Suparco Rs 24 billion, and Cabinet Division Rs 50.33 billion in the next financial year. Rs 245 billion has been allocated for provinces and special areas, and Rs 93.44 billion will be spent on provincial projects.
It is proposed to allocate more than Rs 70 billion for merged districts, 82 billion for Azad Jammu and Kashmir and Gilgit-Baltistan, 19 billion for Federal Education and Professional Training, and 11 billion for Defense Division. The Higher Education Commission will get Rs 42 billion, the Railway Division will get Rs 24 billion, Planning and Development will get Rs 12 billion, National Health will get Rs 12 billion in development funds, while the Interior Ministry will get Rs 10.9 billion, and the Information Ministry will get Rs 4.33 billion.
Addressing the meeting, Federal Minister for Planning Ahsan Iqbal said that half of our expenses are going to repay loans. Unfortunately, the development budget has been shrinking for the past few years. We have to find a solution to the dire situation. We will have to increase revenue at the national level. Continuity of policies is necessary for sustainable development. Pakistan is among the countries with the lowest tax collection in the world. The government is chasing tax evaders.
In the next fiscal year’s budget, more than Rs 1,000 billion will be allocated for the development budget. Balochistan will be given Rs 250 billion. The development budget amount is Rs 100 billion less than this year. Priority will be given to national and water projects, after India’s threats, the early construction of Diamer-Bhasha Dam has become necessary, funds will be allocated for Karakoram Highway Phase II, N-25 Karachi-Quetta-Chaman highway will be constructed, Hyderabad-Sukkur Motorway is also among the priorities.
More than half of the budget will go to repaying loans, more than 118 unnecessary projects have been closed. Ahsan Iqbal said that the provinces should now complete provincial projects themselves, despite the 18th Amendment, the federation has been helping the provincial governments in completing their development projects.
The provinces have much more resources than the federation, federal projects should be prioritized in the national interest. If any project could not be included, then I apologize in advance, it was difficult to include the projects of all ministries within 1000 billion. Budget provision for development is decreasing, our population is increasing.
To stop tax evasion, every citizen will have to become a small businessman. Ahsan Iqbal said that the reduction in the development budget may affect the country’s economic development and strategic plans. In the federal PSDP, Rs 120 billion has been allocated for the Quetta-Chaman-Karachi (N-25) Expressway.
The remaining Rs 880 billion after taking out the Rs 120 billion allocated for the N-25 is insufficient for development works and may be dangerous for future development. The water sector is the government’s priority, but with the existing resources, the completion of the Diamer-Bhasha Dam will take 20 years.
