Islamabad:
The National Economic Council approved on Wednesday an expanded national development of RS3.9 billion, since some of the provinces have demanded to review the National Finance Commission and reopen the problem of agricultural income tax with the International Monetary Fund.
The NEC approved the Federal Public Sector Development Program 2025-26 shows government political priorities to appease allies and spend more on roads. He approved the reduced budgets for the atomic space and energy programs of Pakistan, Health and Education, but increased the assignments for specific projects of Sindh and the schemes of the parliamentarians.
Directed by Prime Minister Shehbaz Sharif, the NEC also established the objective of economic growth in 4.2% and inflation at 7.5% for the next fiscal year 2025-26. The NEC is the constitutional body of the nation that has a mandate to approve macroeconomic and development plans.
The NEC also expressed concern about the growing population and showed a resolution to find a solution, since economic growth in this fiscal year was almost equal to the population growth rate.
The NEC approved the RS1 Billones for the Federal Public Sector Development Program and RS2.9 billion for provincial annual development plans. The cumulative budgets of RS3.9 Billones deny the harsh realities of the fiscal land, since the federal government was even at the point of further reducing some critical assignments proposed to leave space for a more politically oriented development expense.
Against its previous plan to assign RS50 billion for discretionary expenses in the schemes of the parliamentarians, the allocation has been approved at RS70 billion, the NEC document showed. Not only that, the federal government further increased the expense in the development project of the three -day allocation provinces of RS93.4 billion to almost RS106 billion.
The Chamber has been created further reducing health and level education spending approved by the Annual Plan Coordination Committee on Monday. The allocation of the Higher Education Commission is drastically reduced to RS39.4 billion, while the Ministry of Health Budget is reduced to RS14.3 billion. To leave space for political projects, the allocation of projects of the electricity sector was reduced from the rupees proposed previously to RS104 billion to RS90 billion. But the allocation of the water sector has increased to RS133 billion, from RS119 billion proposed previously.
Compared to the Budget approved by the APCC on Monday, the budget of the Space and Higher Environment Research Commission (Supparco) has been reduced from RS24.2 billion to only RS5.4 Billon, while the Pakistan Atomic Energy Commission Budget is reduced from RS4.7 billion to RS781 million.
The budget has been completed by a committee that includes the Vice Prime Minister Ishaq Dar and the political advisor of the Rana Sannuallah Khan Prime Minister.
Such large assignments for provincial projects breach commitments to the IMF to reduce federal expenses in provincial projects.
The sources said that some of the NEC members discussed the low growth of the agricultural sector of only 0.6% in this fiscal year and urged to change economic policies, including the high cost of inputs. The meeting participants said Sindh asked to review the Income Tax of Agriculture and carry it out with the IMF.
The Secretary of Finance, Imdad Ullah Bosal, did not comment on the question of whether the Ministry of Finance will address the matter with the IMF.
The four provincial governments have approved the new laws of agricultural income tax, but have not yet been applied. There is a great possibility that the IMF does not entertain any request.
The Khyber Pakhtunkhwa government held the issue of delay in the reopening of the NFC award, since the provincial government requires greater participation in the light of the fusion of tribal districts. The Prime Minister assured the KP government to convene the NFC meeting in August.
However, the Government has further reduced the assignment of MPP districts of RS70 billion to RS65.4 billion that had been approved by the APCC on Monday.
The Punjab government raised the highest tax issue in agricultural machinery.
The NEC approved RS2.86 billion for the four provincial governments, with the highest expense of Punjab worth RS1.2 billion. Khyber-Pakhtunkhwa will spend RS417 billion. The Sindh government plans to spend RS995 billion and the Baluchistan government proposes RS280 billion for development.
The development allocations proposed by the four provinces are approximately RS860 billion more than the IMF has included in its plan. It means that the provinces may not spend the full assignments or the IMF cash surplus objective will not be fulfilled.
The NEC also reviewed the implementation of the annual plan for this prosecutor and approved the economic objectives for the next prosecutor. He also took a review of the implementation of the PSDP for the current fiscal year, taking note of the low use of the funds.
The NEC also discussed the CDWP progress report and the schemes approved by CDWP and ECNEC in the last year. The NEC authorized the publication of the 13th 2024-29 five-year plan and approved the Uraan Pakistan implementation framework.
Exports are projected at $ 35.3 billion, while foreign remittances are expected to exceed $ 39.4 billion in the next fiscal year. Imports are projected at $ 65.2 billion with the estimated current account deficit at $ 2.1 billion for the next fiscal year.
Currently, 1,071 development projects are being implemented with a total cost of RS13.4 billion. These projects require that an additional RS10.2 billion be completed, and the Ministry of Planning estimates that it would take more than a decade to finish them all.
The NEC also approved to publish the economic plan of five years 2024-29. The NEC was told that the 13th five -year plan has been updated as a result of the questions of the interested parties and is ready for publication.
The five -year plan is aimed at a balanced regional and equitable development, improves the orientation of the export of the economy (vibrant SME sector (social protection and relief of poverty (it improves the quality of human resources, advancing in the knowledge economy, the adaptation and mitigation strategy to combat climate change.
The prime minister launched ‘Uraan Pakistan’ on December 31, 2024 and the NEC approved on Wednesday its implementation framework.
