960429

NEC may

approve Rs 102.2 bn

PSDP today

KHALEEQ KIANI

ISLAMABAD: The National Economic Council (NEC), the supreme economic policy-making forum of the country, is expected to approve a Rs 102.2 billion Public Sector Development Programme (PSDP) for 1996-97 on Thursday.

The total outlay will also include Rs 28 billion Corporation Programme 1996-97 for Wapda, OGDC, NHA and National Mass Transit Authority (NMTA).

The meeting will be presided over by Prime Minister Benazir Bhutto and attended by the four chief ministers, AJK Prime Minister, provincial finance ministers, besides federal secretaries, and senior officers.

The PSDP of Rs 102.2 billion includes federal ministries - Rs 37.914 billion; special areas - Rs 3.34 billion; special programmes - Rs 7.44 billion; social action programme (SAP) - Rs 10.5 billion; Non-SAP - Rs 15 billion and Corporate Programme of Wapda, OGDC, NHA and NMTA channelled through budget - Rs 28 billion.

Earlier, the planning commission had formulated PSDP with a total outlay of Rs 97.7 billion against the last year's PSDP allocation of Rs 96.6 billion, only a shade higher over the last year, but it has been revised at APCC meeting to meet the demands of the provinces.

During the meeting of the Annual Plan Coordination Committee (APCC) held on May 18, a number of adjustments were proposed by the representatives of the provincial governments and demanded increase in the provincial PSDP.

An increase of Rs 4.5 billion from Rs 97.7 billion to Rs 102.2 billion has been allowed by the Prime Minister in the overall size of PSDP. The additional resources will go to Mass Transit Projects in Karachi and Lahore - Rs 2 billion; peoples works programme - Rs 0.5 billion; population welfare - Rs 0.4 billion; health sector - Rs 0.3 billion; education sector - Rs 0.3 billion and projects and schemes to be undertaken in the provinces under Prime Minister's directives - Rs 1.0 billion.

After meeting these requirements, there is no room in the overall size of PSDP for increasing the allocations to provinces.

Besides approving the Rs 102.2 billion PSDP, the NEC will authorise the planning commission to formulate the detailed programme and to make adjustments in PSDP within the approved size as and when needed.

The ministries concerned with the Corporate Programme are being directed to ensure strict compliance of the cap placed on their investment programmes and adherence of financing plan.

The Finance Division too will be asked to ensure releases of allocated funds to different ministries, divisions and agencies strictly on schedule.

New programme and initiatives have been introduced in PSDP, i.e. accelerated water management, accelerated on-farm water management, national drainage scheme and Karachi and Lahore Mass Transit Programmes. The size of programme of the federal ministries and divisions remains at the existing level or still lower. The programme of the provinces too had to be contained at current year's level due to resource constraints.

In the corporate sector, the programme of NHA will be entirely financed from the budget. As for NMTA, a part of their programme would also be financed from the budgetary sources. As regards Wapda (Power) and OGDC, foreign loans which pass through the budget to these corporations would be part of budgetary programme, as in the past. For the rest of their programmes, they would either finance it through own resources or from capital market or foreign loan/equity. As for these and other corporations, special care has been taken this year to limit their investment programme within resource availability with them so that these corporations do not take recourse to net incremental bank borrowing or withhold government or other dues to finance their development commitments. These corporations would be allowed bank borrowing only to the extent of their principal payments during the year. This was essentially needed to ensure that their excessive commitments do not destabilise fiscal or monetary balances.

While formulating the programme, the priorities of the government have been kept in view by allocating larger resources to social and environment sectors, population welfare, health and nutrition sectors. At the same time, core investment programme supported by the donors has been largely accommodated within the resource envelope.