Rs600b PSDP okayed

ISLAMABAD-Annual Plan Coordination Committee (APCC) Friday approved Public Sector Development Programme (PSDP) for 2009-10 with the projected amount of Rs 600 billion
After presiding over the meeting, Deputy Chairman Planning Commission Sardar Assef Ahmed Ali said that Kalabagh Dam project was not permanently abandoned but construction work could be started on the project once all the provinces agreed on it.
The project was not shelved forever at the official level but deferred till consensus was reached among the stakeholders, he stated.
To a question Sardar Assef replied that the announcement of shelving the mega power project might be someones personal opinion but not the official ones.
The federal component of the next financial year PSDP outlay is Rs 400 billion whereas Rs 200 billion had been allocated for provincial development projects.
The APCC has also estimated 3.3 per cent growth rate for the coming financial year. The APCC revised the last years growth rate from 5.8 to 4.1 per cent. The inflation has been estimated at 9 per cent for the next financial year whereas it would be 17.8 per cent by the end of the current financial year.
Deputy Chairman Planning Commission said that the growth rate registered during the current financial year 2008-09 had been 2 per cent against the target of 5.5 per cent as large and small scale manufacturing (LSM) sectors had shown negative growth. However, agriculture had shown 4.7 per cent growth against the target of 3.5 per cent. He hoped that the overall growth rate may be close to 2.2 per cent till the compilation of final figures.
In the wake of economic slow down due to external and internal shocks, the government took various remedial measures for fiscal consolidation that also resulted in rationalization of PSDP 2008-09.
The current financial year PSDP was rationalized from its original size of Rs 371 billion to Rs 219 billion, which adversely affected the pace of ongoing projects.
He explained that the projected PSDP 2009-10 would be Rs 600 billion, out of the total recommended allocation, Rs 105 billion would be for the new projects. The allocation of Rs 25 billion for ERRA was also included in this amount, he added.
He said that the Planning Commission had placed demands of Rs 825 billion for development projects submitted by the ministries and departments.
He said that Secretary Finance had informed the APCC meeting that Rs 400 billion would be available for the next financial year to complete the ongoing as well as new projects. He ruled out the financing that FOP pledges would not be included in these allocations.
He said that the government had taken loan from the International Monetary Fund (IMF) and had to take measures to control inflation and spending that also affected the growth rate for the current financial year.
He said that the government would give top priority to the social sector and water, power and agriculture sectors would be on the second priority. He said that agriculture sector had contributed to the countrys growth rate.
Responding to a question about the support price of Rs 950/40 kg that could result in more inflation, he said that the government would give subsidy on it to control the inflation. He said that price of milk had increased resulting in hike in inflation and government was trying to find out the reasons.
He further said that hike in prices had been controlled in the past by magistrates but the former government had disturbed the system leading to failure for controlling the increase in inflation.
The government would set aside a substantial amount for economic revival of IDPs during 2009-10, he said. He hoped that Swat operation would come to an end soon and the Planning Commission was preparing rehabilitation and reconstruction plan for the IDPs.
Substantial allocations were considered for mega ongoing projects which were in advance stage of completion and also for new initiatives in the infrastructure, social and production sectors like raising of Mangla Dam, Watercourses, Kachhi, Thal and rainy canals, RBOD-II & III, Barrages, Small Dams, National Highways, Expressways and Motorways, Chashma, 2, 3 & 4, Diameer Basha and Neelum-Jhelum Hydro Power projects, Universities, Cadet Colleges, National Health Programmes.
In order to reduce the regional disparity, special development packages for NWFP, FATA, Balochistan, Northern Areas and AJK were also considered.