Pakistan’s National Economic Council (NEC) has approved a significant boost to public investment, aiming to accelerate economic growth in the next fiscal year. The national development plan, valued at Rs3.792 trillion, is evidence of a rising economy.
This expansionary approach involves a 47% rise in the federal Public Sector Development Programme (PSDP) to Rs1.4 trillion compared to the current year’s allocation. This includes Rs 100 billion allocated for public-private partnership (PPP) projects, further bolstering overall investment. State-owned entities are also expected to contribute Rs 197 billion to development activities, bringing the total federal investment to Rs1.696 trillion.
The increased federal PSDP allocation signifies a return to previous practices, where constituency-based schemes and ongoing provincial projects receive funding. Fortunately, all four provinces secured higher allocations compared to the initial recommendations.
To address these adjustments and ensure a more balanced approach, the NEC decided to transform itself into a more proactive forum. A special committee comprising federal and provincial representatives will be established to address urgent needs and ensure all regions benefit from development efforts.
The breakdown of the PSDP reveals a shift in priorities. Higher education emerged as a major beneficiary, with its allocation rising to Rs93 billion from the proposed Rs32 billion. Additionally, special areas like Azad Jammu & Kashmir, Gilgit-Baltistan, and the merged tribal districts received increased funding.
The overall public investment plan, including both federal and provincial allocations, is expected to reach Rs3.79 trillion. There is a clear intent to uplift the lower and middle class with positive government initiatives, one of which is the “Green Tractor” scheme. It’s aimed at providing farmers with small, medium, and large tractors at subsidised rates so that they may streamline their processes.
The economic growth target for the next fiscal year is set at 3.6%, and by all accounts, things are looking very positive. Both the private and public sectors stand to benefit, thereby benefiting individuals and industries. Additionally, the total investment-to-GDP ratio is expected to climb from 13.1% to 14.2%, driven by economic growth, an improved business environment, and political stability.
