NEC approves Rs 3.792 trillion for development expenditure

The National Economic Council (NEC) has approved a total development expenditure of Rs 3.792 trillion for the next financial year.

The new grant saw an increase of 57 percent to Rs 3.792 trillion as compared to Rs 950 billion of the federal PSDP for the current financial year.

The approval was given during a meeting chaired by Prime Minister Shehbaz Sharif.

The Council approved the Annual Plan for 2024-25 after detailed consideration of the 13th five-year plan.

According to sources, public investment for the financial year 2024-25 was also considered, while the meeting also reviewed the progress report of ECNEC and the progress report of the Central Development Working Party so far.

Sources said that in the meeting, the provincial chief ministers, provincial minister for planning and development and advisor to the chief minister approved the federal PSDP of Rs 1.5 trillion for the next financial year, which included public-private partnership and investment of Rs 196 billion of SOEs and provincial annual development projects worth Rs 2.095 trillion.

The provincial PSDPs approved by the NEC, which includes Punjab (Rs700 billion), Sindh (Rs764 billion), Khyber Pakhtunkhwa (Rs351 billion), and Balochistan (Rs281 billion).

Rs 824 billion have been allocated for infrastructure projects, Rs 280 billion for social sector, Rs 75 billion for special areas, Rs 64 billion for merged districts, Rs 79 billion for IT, Rs 28 billion for governance, Rs 50 billion for production sector, Rs 42 billion for food and agriculture and Rs 8 billion for industries has been approved.

The hurdle also approved the target of 3.6 percent growth rate for the next financial year, based on 2 percent in the agricultural sector, industrial sector.

The gross investment-to-GDP ratio for the financial year 2024-25 is estimated at 14.2 per cent and fixed investment is estimated at 12.5 per cent, while the national savings for 2024-25 is 13.3 per cent of GDP.

Inflation is expected to moderate to 12 per cent in the next financial year, while the current account deficit is likely to widen in 2024-25 as import restrictions are further eased to achieve growth goals, especially to revive the industrial sector.