Latest news with #PublicSectorDevelopmentProgramme
Express Tribune
21 hours ago
- Business
- Express Tribune
Are stabilisation measures backfiring?
Under the emerging situation, the people are facing unemployment and underemployment and this scenario is grave from the socio-political point of view. photo: file Listen to article The stabilisation measures have impacted the real economy a great deal. The market economy has been growing slowly, as indicated by the statistics of GDP. The current account surplus from July to May 2025 remained around $1.8 billion. This surplus has been achieved at the expense of imports, where deliberate attempts have been made to scale down imports in the last couple of years. In addition, remittances of around $38 billion also helped in achieving the surplus. The massive import compression, started in FY2023 to stabilise the economy, has produced results. This compression played an important role in bolstering the foreign exchange reserves held by the State Bank of Pakistan (SBP), which have crossed $14 billion. If the economy operates at the current level, foreign exchange reserves will cover around 2.5 months of merchandise imports, since imports remained around $58 billion in FY2025. Apart from rollover of commercial loans from China, the SBP intervened in the foreign exchange market to fulfil the target of foreign exchange reserves agreed with the International Monetary Fund (IMF). On the monetary front, the SBP has kept the policy rate at 11% to attract international financial capital. This high rate will attract hot money to finance the current account in the event it turns into deficit. The growth in imports is linked with the growth in the real economy, which will turn the current account surplus into a deficit. As the level of aggregate demand is low, business firms cannot sell their products to consumers. Furthermore, the level of aggregate demand remained low owing to regressive taxation and high energy costs. The gas prices have been revised upward in FY2026, while electricity prices are already at an elevated level. The higher international crude oil prices have started to affect the masses. The salaried class has paid around Rs550 billion in income tax in FY2025, and the tally would remain around this level in the current financial year. All these measures have reduced the purchasing power of consumers. Many firms have invested in treasury bills, bonds, and Sukuk, since these firms intend to remain liquid. A whopping Rs13.5 trillion has been parked by the corporate sector in bills, bonds, and Sukuk till December 2024. Business firms did not enhance investment in the capital development of the country. As a result, the index of the Large-Scale Manufacturing sector has decelerated by 1.2% in the eleven months of FY2025. The government did spend around Rs1,050 billion through the Public Sector Development Programme (PSDP) in FY2025. The tight-fisted Ministry of Finance (MoF) allowed the release of a large chunk of the budgeted funds in the last quarter. The development funds have been diverted from development projects to meet the primary budget surplus. The tight fiscal and monetary policies have also reduced the level of economic activity a great deal. The high debt servicing cost has further reduced the fiscal space of the government. Under the Extended Fund Facility (EFF), the government intends to bring down the fiscal deficit to around 6%. This reduction in the fiscal deficit can be achieved by scaling down development expenditure. The impact of low development expenditure has already affected the cement, steel, glass, and allied manufacturing sub-sectors. In addition, the construction sector remained dull in the outgoing financial year. In a nutshell, stabilisation measures have started to implicate the masses a great deal. Under the emerging situation, the people are facing unemployment and underemployment. The level of unemployment is high for university graduates. This situation is grave from the socio-political point of view. Will policymakers take stock of the situation? THE WRITER IS AN INDEPENDENT ECONOMIST
Express Tribune
a day ago
- Business
- Express Tribune
Experts warn of crisis over HEC budget cuts
The Higher Education Commission (HEC) is facing serious challenges due to significant budget cuts and reduced funding. Despite soaring inflation and rising operational costs, the annual budget allocation for the HEC has been limited to only Rs39.48 billion. Education experts have called for an increase in HEC's budget and urged the government to declare an "education emergency" to ensure access to higher education for every child. According to official documents, the government has allocated Rs39.48 billion under the Public Sector Development Programme (PSDP) for 140 ongoing and 12 new schemes. These include: The Allama Muhammad Iqbal Scholarship Programme for students from Afghanistan, Bangladesh, Uzbekistan, and other friendly countries; construction of the academic block at Shaheed Zulfiqar Ali Bhutto Medical University; development of the main campus of Bacha Khan University; upgradation of blocks at the University of Baltistan; establishment of sports academies; organisation of Youth Olympics and expansion of the National University of Medical Sciences (NUMS) Rawalpindi. Additionally, Rs1 billion has been earmarked for the third phase of the Fulbright Scholarship Support Programme, while Rs2.3 billion has been set aside for the Overseas Scholarships Programme for MS/MPhil students. Another Rs3.67 billion has been allocated for the PhD scholarship programme under Phase I of the US-Pakistan Knowledge Corridor. The Pak-Korea Nutrition Centre will receive Rs800 million. It is worth noting that in 2018, the HEC's development budget stood at Rs46.23 billion. Seven years later, despite sharp increases in inflation and operational costs, the budget for FY 202526 has been slashed to Rs39.48 billion. Educationists argue that to improve literacy, expand access to higher education, and drive socio-economic development, the government must declare an education emergency and increase the education budget.
Business Recorder
3 days ago
- Business
- Business Recorder
Target to achieve $60bn in exports over next 5 years: Ahsan
ISLAMAABD: Federal Minister for Planning, Development and Special Initiatives Ahsan Iqbal said the government's target is to achieve $60 billion in exports over the next five years. While addressing a meeting of National Assembly Standing Committee on Planning, the minister said, 'If we work with dedication, the dream of a $3 trillion economy by 2047 can become a reality.' The committee met with Syed Abdul Qadir Gillani in the chair in the auditorium of the Ministry of Planning, Development and Special Initiatives, Islamabad on Friday. He said that for the first time in the country's history, Rs1 trillion have been spent on PSDP (Public Sector Development Programme) projects. He said that a clear roadmap for 'Uraan Pakistan' (Pakistan's Ascent) to tackle the challenges the country faces. He said that political stability and continuity of policies are essential for the completion of development projects. He said that a long-term integrated policy and a conducive environment are fundamental requirements for development. The minister said that 'everyone must work for the country's economic growth, rising above political affiliations.' He said the Ministry of Planning has identified five solid pillars for sustainable economic growth. The minister gave the committee an overview of Uraan Pakistan — the National Transformation Plan 2025–2030. He noted that earlier national five-year plans succeeded due to political continuity, unlike the present scenario, where frequent democratic disruptions have hindered progress. He emphasised that even the best ideas require a stable and enabling environment to flourish. The minister highlighted Pakistan's economic turnaround since 2022, stating that inflation had been brought down from double to single digits. He elaborated on the government's strategic focus on the 'Five Es': Exports, E-Commerce, Energy, Environment, and Ethics — underlining them as critical pillars of the transformation agenda. He said that under the second pillar of the 'Five Es,' projects involving modern technology are being pursued. He said that under the 'Five Es,' the completion of water projects, in light of climate challenges, is a government priority. He said that the completion of the Diamer-Bhasha Dam is among the government's top priorities. He said that the government's aim is to ensure the supply of affordable and reliable energy. Under the fifth pillar of the 'Five Es,' the government is focusing particularly on human resource development, said the federal minister. 'After the 18th Constitutional Amendment, most departments have been devolved to the provinces, but centralisation of powers within the provinces has undermined its spirit. There should be a national dialogue on empowering local governments or creating new provinces to make Pakistan's administrative structure more effective,' said the federal minister. He said that controlling population growth is a national emergency and for this purpose, a National Task Force is being established. He said that just as we defeated India in 'Operation Bunyanum Marsoos,' we will achieve supremacy in the economic field with the same determination. The minister said that the government has achieved significant success in controlling inflation. He said that climate change has created new challenges for the national economy. The committee commenced with a follow-up discussion on the tragic Multan LPG tanker blast of January 2025. The committee raised serious concerns over the inquiry process and the distribution of compensation packages, particularly questioning why the elected member of the National Assembly was not consulted throughout the process. The committee recommended a reinvestigation into the incident. Chairperson Syed Abdul Qadir Gillani expressed his resolve to pursue the matter across all relevant forums, vowing to ensure accountability and prevent future tragedies. The committee called for a comprehensive briefing on the case. The meeting was attended by Committee Members Naz Baloch, Muhammad Moazzam Ali Khan, Farhan Chishti, Akhtar Bibi, Dawar Khan Kundi, and Yousaf Khan. Senior officials from the Ministry of Planning, Finance Division, OGRA, and other relevant departments were also present. Copyright Business Recorder, 2025
Business Recorder
5 days ago
- Business
- Business Recorder
Cabinet approves 15pc hike in EOBI pensions
ISLAMABAD: In a bold attempt to jolt federal ministries out of complacency, Prime Minister Shehbaz Sharif on Wednesday announced that performance evaluations will now be held after every two months, guided by newly introduced key performance indicators (KPIs). The move, aimed at sharpening accountability and turbo-charging service delivery, marks a renewed push by the government to shake off inertia in Islamabad's corridors of power. Chairing a meeting of the federal cabinet, PM Sharif was emphatic: 'This message I want to make loud and clear – it is all about delivery and service to the nation.' Ministries exceeding expectations will be rewarded, while those falling behind could face consequences, he warned. The prime minister singled out the Ministry of Planning and Development for praise, highlighting its efficient use of development funds. Spending under the Public Sector Development Programme (PSDP) has now crossed the Rs1 trillion mark – a milestone PM Sharif credited to Planning and Development Minister Ahsan Iqbal's stewardship. In a nod to market confidence, PM Sharif welcomed the stock market's record-breaking performance this week, calling it a positive signal of macroeconomic recovery and investor trust. He insisted the uptick was the result of coordinated government efforts to stabilise the economy. Among the cabinet's key decisions was a 15 percent increase in pensions under the Employees' Old-Age Benefits Institution (EOBI), effective from 1 January 2025. The raise, which will be funded internally by EOBI, was proposed by the Ministry of Overseas Pakistanis and Human Resource Development. PM Sharif also ordered the formation of a cabinet committee to spearhead long-overdue institutional reforms in EOBI. The committee will explore extending pension coverage to Pakistan's vast informal workforce – including domestic workers, farm labourers, and other marginalised groups – in what could become a landmark shift in social security policy. In the maritime sector, the cabinet approved legal proceedings to advance the Sea Carriage Shipping Documents Bill, 2025, as part of efforts to modernise trade documentation. Meanwhile, a five-year extension was granted on the exemption of import duties for life-saving medicines – including anti-cancer and cardiac drugs – following a proposal from the Ministry of National Health Services. These medicines will continue to be restricted to hospitals and authorised institutions, with open-market sales remaining banned. Elsewhere, the cabinet ratified a series of legislative decisions taken by the Cabinet Committee on July 2 and 3. On a sombre note, the prime minister expressed deep sorrow over the tragic loss of lives in the ongoing monsoon season, particularly the deadly incident in Swat. Calling it an unfortunate incident, he stressed the need for more robust disaster preparedness and response. He said the federal government, in collaboration with the National Disaster Management Authority (NDMA) and provincial bodies (PDMAs), is working to strengthen emergency response systems across the country. He commended the NDMA, which is headed by a serving three-star military general, for its proactive role in disaster management. Finally, the prime minister lauded law enforcement and local administrations across the provinces, as well as in Azad Jammu and Kashmir and Gilgit-Baltistan, for ensuring peace and order during Muharram. Their coordinated efforts, he added, helped maintain national harmony during a critical time. Copyright Business Recorder, 2025
Business Recorder
5 days ago
- Business
- Business Recorder
Petroleum Development Levy: NHA to get Rs100bn for 3 Balochistan highway projects
ISLAMABAD: The National Highways Authority (NHA) will get funding of Rs 100 billion from petroleum development levy for three highway projects for Balochistan against the demand of Rs 160 billion in the ongoing financial year. According to NHA document, the authority demanded Rs 160.2 billion in Public Sector Development Programme (PSDP), but gets allocation of Rs 100 billion. For dualisation of Khuzdar-Kuchlak Section (N-25) length 330.52 km, Rs 34 billion has been allocated against the demand of Rs 50.8 billion. For dualisation and rehabilitation Karachi-Quetta-Chaman Road (N-25) from Karachi-Kararo (233 km) and Wadh–Khuzdar (41 km) having total length of 273 km, Rs 33 billion has been allocated against the demand of Rs 52.5 billion. For dualisation of Kararo–Wadh Section (83 km) Kuchlak–Chaman Section (104 km) of National Highway (N-25) length 187 km, Rs 33 billion has been allocated against the demand of Rs 56.9 billion. The NHA right now is working on Rs 2,200 billion worth of roads and highways projects. In the PSDP for FY26, the NHA requested funds for 161 schemes but the federal government approved funds of Rs 227 billion for only 105 projects. Because of shortage of funds, the NHA through toll tax and other sources earned Rs 64.8 billion in FY25 compared to Rs 32 billion in FY24. Balochistan's road infrastructure: Govt sets 3-year timeline for Rs400bn projects This amount would be used for maintenance and rehabilitation of roads and highways falls in the domain of NHA. It may be mentioned here, Prime Minister Shehbaz Sharif in April instead of passing on the relief of reduced oil prices in international market to consumers, directed to use saved money for reconstruction of the N-25 Highway and completion of Phase-II of the Kachhi Canal project in Balochistan. Transformation of the N-25, known infamously as the 'deadly road', into a Motorway-standard highway. The N-25, connecting Karachi to Chaman via Quetta, Kalat, and Khuzdar, has claimed more than 2,000 lives in recent years due to its poor condition and single-lane structure. PM Shehbaz announced that the Rs 300 billion reconstruction project would now move forward under the federal government's supervision, with a third-party validation to ensure high standards of construction. The construction of highway was first approved in the fiscal year 2022-23, but progress stalled due to funding gaps in the past. Copyright Business Recorder, 2025
