ISLAMABAD - The Annual Plan Coordination Committee (APCC) Friday set economic growth rate target at 5.7 percent for the next fiscal year (2016-17).

“APCC has approved total development outlay of Rs1675 billion for next fiscal, which includes Rs800 billion for federal and Rs875 billion for provincial annual development plans (ADPs),” said Federal Minister for Planning, Development and Reforms Ahsan Iqbal while talking to the newsmen after the meeting.

The minister said that the problem with the federal PSDP is that out of 3Ds (defense, debt and development) the share of development budget is the lowest. “The major share of GDP goes to debt servicing which costs around Rs 1500 billion. Defence spending is around Rs 800 billion, while developmental budget is Rs 800 billion,” he informed. However, he said that the total PSDP allocation has been increased from Rs 700 billion (2015-16) to Rs 800 billion for the upcoming fiscal. Similarly, he added, the total developmental outlay has also been increased to Rs 1675 billion. “The provinces and ministries have submitted the projects worth Rs 1800 billion for inclusion in the PSDP and the government will try to accommodate it in the current PSDP ceiling,” he said.

He said that new education project is being initiated from upcoming fiscal year. “Earlier our target was 7500 Phds but now the government is planning to have 10000 PhDs in the country,” he informed. Ahsan Iqbal said a record amount of Rs21 billion would be allocated for Higher Education Commission next year.

Ahsan Iqbal said that energy, infrastructure and human resource development are the top priorities of the government in the upcoming budget. He said the priority had been given to projects of China-Pakistan Economic Corridor (CPEC) which could be completed at the earliest. Energy projects including those relating to Wapda and transmission and distribution will be accelerated, he said.

The government has started work on Dasu and Diamir Bhasha and has allocated funds for it, he said, adding that land has been acquired for the projects. The ground breaking for these projects would be performed by end of this year, he told the media. However, he warned that if civil work was not started on Diamir Bhasa dam project in a time span of 10 to 15 years the country will face drought.

For the first, he said, 3600MW of gas-based power projects had been included in the PSDP while many projects of CPEC would move ahead in the Independent Power Project Mode so that these projects could be completed by 2017 to achieve a breakthrough in energy shortfall. The minister said that Rs130 billion would be allocated in the next year PSDP for power sector projects.

Ahsan Iqbal said the government was focusing on connectivity to enhance the country’s mobility with allocations of Rs290 billion for the infrastructure. Besides development plans, NHA and Wapda will also self finance some projects, he said.

The minister said that for Railways would be allocated Rs40 billion, water sector Rs31 billion, AJK and Gilgit-Balochistan Rs25 billion, ministry of interior Rs9.7 billion, Pakistan Atomic Energy Commission Rs27 billion, security and temporary displaced persons in tribal region Rs100 billion, Prime Minister’s Youth Scheme Rs20 billion, gas development fund Rs25 billion, while Rs12 billion will be allocated for ports and shipping.

The next year growth rate target was set at 5.7 per cent, up one percent from 4.7 per cent growth rate during the fiscal 2015-16. The growth target of 5.7 per cent is more realistic, the minister said. The budget strategy paper approved by the federal cabinet early this month had projected 6.2 per cent growth rate for next year.

On the GDP growth, the minister said that there is a difference of opinion about the target of GDP growth between the Planning Ministry and Finance Ministry. According to the planning ministry, estimated the GDP growth will be around 5.7 percent while for finance ministry it will be 6.2 percent growth in the upcoming fiscal. He said that a meeting will resolve the issue of the GDP growth target. “I hope we will set a realistic target for the GDP,” he hoped.

The annual plan 2016-17 envisaged agriculture sector growth of 3.48 per cent during the next year. Important crops are expected to grow by 2.5 per cent next year, while other crops would post growth of 3.2 per cent against this year’s fall of 0.31 per cent. The overall industrial sector is targeted to grow by 7.7 per cent in financial year 2016-17.

Manufacturing sector was targeted to grow by 6.06 per cent next year against this year’s improvement of 5 percent. Similarly large scale manufacturing will increase by 5.9 per cent. Construction sector was expected to grow by 13.2 per cent next year, while electricity generation and gas distribution was also expected to increase by 12.5 percent. The services sector was targeted to go up by 5.73 per cent next year.

The size of GDP (measured by market price) was projected to increase to Rs33,063 billion next year from current year’s provisional size of Rs29,598 billion this year. The target for next year’s total investment has been estimated at 17.7 per cent against current year’s 15.2 per cent of GDP while national savings are projected to grow to 16.1 per cent of GDP instead of 13.6 per cent during this year. Inflation was projected to grow by six per cent next year while per capita gross national product (GNP) has been estimated at Rs179,900 next year against Rs162,569 of current year.

The minister further said that in the past years the government had utilized 90 percent of PSDP allocations and this year too it is hoped that the same target will be obtained.

He said that Karachi-Peshawar Railway track will be upgraded, which will help in reducing the railway fares. He also rejected the impression that PSDP allocation is geography or provincial based and said that PSDP is allocated on the basis of necessity and priority.