PESHAWAR: The National Economic Council (NEC) chaired by Prime Minister Imran Khan on Wednesday approved the national development outlay of Rs1,324 billion for upcoming budget 2020-21, which includes Rs48 billion for merged tribal districts of Khyber Pakhtunkhwa.
A special allocation of Rs70 billion has been made for COVID-19 pandemic response as the social sector allocation has been increased to Rs249 billion. Coronavirus has impacted different sectors of the economy in the end days of the current fiscal and its impacts are likely to continue with the start of the new fiscal as the pandemic is not over yet. The allocated funds for health and population are Rs20 billion, education Rs35 billion, sustainable development goals (SDGs) achievement programme Rs24 billion, climate change Rs6 billion, special areas such as AJK, GB Rs40 billion and governance Rs4 billion.
The Public Sector Development Programme (PSDP) of Rs650 billion and provincial annual development programmes (ADPs) of Rs 674 billion for upcoming budget was approved during the meeting.
The NEC also approved macroeconomic framework and envisaged GDP growth rate at 2.1 percent from earlier projected figure of 2.3 percent and inflation at 6.5 percent for the next budget. The growth targets are subject to favourable weather conditions, post COVID-19 economic recovery, managing current account deficit, consistent economic policies and aligned monetary and fiscal policies.
The NEC approved Rs364 billion for infrastructure projects including energy sector projects allocation at Rs80 billion. Transport and communication sector allocation will be at Rs197 billion and water sector allocation stands at Rs70 billion and physical planning and housing Rs35 billion.
The highest economic decision-making body approved Rs20 billion for Science and Technology and Rs14 billion for production sectors.
The federal ministries and divisions got Rs307.2 billion, corporations such as National Highway Authority (NHA), Wapda etc got Rs158.3 billion for the next budget.
The fiscal policy during 2020-21 envisages containing fiscal deficit, additional resource mobilisation, controlling current spending and switching to targeted subsidies while prioritising development spending. The balanced monetary policy is aimed at supporting adjustment process to restore macroeconomic stability and manage aggregate demand.
Average inflation during 2020-21 is projected at 6.5 percent on the basis of subdued demand and suppressed commodity prices in the international markets and second round effect of COVID-19 related economic implications.