Islamabad , Prime Minister Syed Yousuf Raza Gilani Thursday said his Government has tried its best to achieve robust and sustained economic growth, improve investment climate, create employment opportunities, improve social sector service delivery and to reduce poverty from the country.
He made these remarks at the National Economic Council meeting which held here with him in the chair.He said Since inception of our Government in 2008, we had to face serious challenges that hampered our efforts to achieve high economic growth.
These challenges included world-wide economic recession, back-to-back floods in 2010 and 2011, rising international food and fuel prices, security issues, energy shortages, infrastructure constraints, subsidies, circular debt and loss making public sector enterprises. It all negatively impacted investment in the country and kept the economy under pressure.
The PM said his govt introduced prudent policies while introducing reform measures as part of Stabilization Programme. The aim was to control the fiscal deficit that had reached 7.6% of GDP when the democratic Government took over.
”We were able to achieve growth rate in the range of 3.4% during the last two years. We know that this growth rate is not sufficient to achieve the overarching targets of poverty reduction and enhancing employment opportunities. For that we need at least a consistent GDP annual growth of over 7% over a long period of time”.
He said the govt is proposing a GDP growth rate of 4.3% for the next fiscal year, which is quite achievable due to the base provided by our Government.
”Another positive development which I would like to share is the falling inflation rate. The CPI which witnessed increase of 20.8% during 2008-9, is now reduced to around 11%. Similarly the food inflation has been brought down from 23.7% in 2008-09 to around 11% during the current fiscal year and estimated to be in single digit by the end of next fiscal year.”
The Prime Minister said during the last four years, National Development Expenditure has been Rs. 2.2 trillion, including Rs 1 trillion by the Federal Government. Our Government increased the size of development expenditure from Rs 416 billion in 2008-09 to Rs 710 billion during the current fiscal year. This shows an average annual increase of 19.5% during this period.
He said for next financial year total projected national development expenditure is Rs. 863 billion, of which federal government PSDP size is Rs. 350 billion.Even after devolution of social sector Ministries to provinces, the Federal Government committed to bear over Rs 100 billion during the current NFC period for vertical Health, and Population Welfare Programmes and special initiatives,he added.
” We have honored our commitment and during the current fiscal year, Rs 27 billion were provided for these activities in Federal PSDP. Similar amounts for these activities have been proposed during the next year’s PSDP”.
In accordance with the priorities set by my government, Planning Commission has endeavored to maintain regional balance in allocation of funds for the projects. Sufficient allocations have been made for economic and social uplift of less developed regions and special areas, including AJ&K, GB and FATA,PM said
He said the govt initiated important mega projects in energy and infrastructure, which would provide the economy a base for sustainable economic growth in future.
PM Gilani said the priority is to complete projects nearing completion so that the people may benefit from these projects. Mega projects completed during our Government include Chashma Nuclear Power Project 2, Mangla Raising Project, Mirani Dam Project, Islamabad Peshawar Motorway, Islamabad Muzaffarabad Expressway (upto Lower Topa), Khan Khawar Hydropower project.
Some of the mega projects we are initiating next year include: Tarbela 4th Extension, Rehabilitation of NHA Network, Realignment of KKH, Scholarship Programme for Students of Balochistan and Abdul Wali Khan University, Mardan.
He said maintenance of public assets is one of our priority areas. To rehabilitate Railways and to improve its services, we are starting several new projects from next financial year. These projects include: Procurement of 150 Diesel Electric (DE) Locomotives; Manufacturing of 50 DE Locomotives; Special Repair of 150 DE Locomotives; and, Procurement of 500 high capacity bogie wagons. For these projects and other Railway projects, Rs. 23 billion have been allocated in next year’s PSDP.
He was of the view in the same spirit, we have launched management reforms in the energy sector. Boards of Directors of DISCOs have been reconstituted with professional management. GENCO Holding Company has been created to solve the circular debt issue. Efforts are under way to reduce default in private sector and coupled with adoption of conservation measures we would be able to save upto 1000 MW of electricity.
The Prime Minister said govt has also introduced measures to improve governance of the State Owned Enterprises, better expenditure management of public sector and to improve governance and capacity of the Tax Administration.Last Year NEC had approved Framework for Economic Growth.
”Our Government is now in implementation phase through combination of reforms and policy initiatives to reduce economic distortions; improve functioning of domestic markets; create space in cities through proper zoning; energizing youth; engaging communities; inducing investment in human and social capital; and enhancing connectivity”.
The Prime Minister made it clear that the poor and the common man is our number one priority.Govt will honor the commitment made with them. ”We will put the poor at the heart of development process. They have the first right on state resources. Their children have the right to health, education, sanitation, water, housing and other social services. This is exactly what our agenda is and this is what we pursue”.