Provinces take the lead on Rs4.2tr in uplift spending

Fuelled by a 22pc increase in provincial allocations, the National Economic Council (NEC) on Wednesday approved with consensus a record Rs4.22 trillion national development outlay for the next fiscal year to upgrade growth rate to 4.2pc from 2.7 this year, despite an IMF-decreed 29pc cut in the public sector development programme (PSDP) compared to the current year. The provincial expansionary stance is expected to come under the International Monetary Fund’s watch, which has been pushing for greater provincial cash surpluses to support the federal government in delivering a healthy amount for debt servicing, besides effective taxation of the agriculture income under a new national fiscal pact. The meeting of the NEC — the country’s highest economic decision-making forum — was moved up by a day so that the prime minister, who chaired the meeting, could travel abroad. All provincial chief ministers, the deputy prime minister, and federal ministers for planning, finance and information were present. PM’s adviser Rana Sanaullah also attended the meeting.