GDP growth target for next fiscal year set at 4.2%; Only key projects to be prioritised; Exports target set at $35b; Rs150b allocated for social sector; Development budget stands at Rs880b Ahsan Iqbal
Minister for Planning and Development Ahsan Iqbal on Monday said that over 118 different projects worth Rs1,000b were scrapped due to limited resources.
During his interaction with the media following the Annual Plan Coordination Committee meeting in Islamabad, he said: “Today, [we] have to make difficult decisions about limiting the ongoing projects.”
He said it was difficult to accommodate projects from all ministries within a limited budget of Rs1,000 billion. “Now, we have to make decisions in the national interest,” Iqbal added.
Only key projects can be prioritised due to limited funds, the planning minister said, adding that the provincial-level projects should now be completed by the provinces themselves. “Provinces have far more resources than the federation,”
he added. The minister said that everyone must play their part in national development. Shedding light on the upcoming budget, the minister said that the economic size target for next year had been set at Rs129 trillion.
The minister added that Rs150b had been allocated for the social sector and Rs70b for KP’s merged districts in the next budget.
“GDP growth target for the next fiscal year was set at 4.2%,” Ahsan said, adding that the target for exports was set at $35bn.
Earlier, giving a blueprint of the annual PSDP for the next fiscal year at the APCC meeting, he said that fiscal space will be provided in the next PSDP for the projects of strategic importance envisioned under Uraan Pakistan.
He mentioned that these projects include the Diamer Bhasha Dam, Sukkur Hyderabad motorway project, N-25 in Balochistan and Karakoram highway phase two.
The minister emphasised the need for greater synergy between the development projects of the Centre and the provinces for the early completion of national priority projects.
Iqbal said that projects with a foreign component and those nearing completion have also been prioritised in the PSDP.
The minister elaborated that the said allocations for special regions such as AJK, Gilgit-Baltistan and the tribal districts have also been prioritised.
The minister further said that an effort has been made to align the development budget with national priorities while staying within limited resources.
Ahsan Iqbal on Monday said the government will have to prioritise high-value projects, as only Rs880 billion has been allocated for development in the upcoming budget for the fiscal year 2025-26.
The government has adopted austerity measures for the upcoming budget in line with the demands of the International Monetary Fund to implement stricter spending policies and raise revenues to reduce the budget deficit and improve debt sustainability, as part of its $7 billion loan programme. The global money lender also expects Pakistan to achieve a 3.6 per cent economic growth with 7.7pc inflation next year.
“The reason we have these debts is because the govt in power between 2018 and 2022 took multiple loans and the policy rate rose to 23pc due to heavy inflation,” Iqbal added. “Repaying those loans became 55pc of our spending. As a result, this has affected our development budget.”
Breaking down the development budget, Iqbal said that Rs664bn would be allocated to infrastructure projects including energy, water, transport and planning.
“The energy, water and highway sectors will be prioritised,” he noted.
He added that Prime Minister Shehbaz Sharif had ordered that Rs120bn of the Rs1 trillion development budget be allocated to upgrade the N-25 Highway in Balochistan, which runs from Chaman to Karachi through Quetta.
“The road will be upgraded to an expressway,” he said. “Excepting this project, we have Rs880bn with which we have to balance the PSDP (Public Sector Development Programme).”
