The APCC also recommended 4.2 per cent GDP growth for the next year on the assumption that agriculture, manufacturing and services sectors would grow by 3.4, 3.7 and 5.1 per cent respectively. The Planning Commission stated that some critical projects could not be fully funded in the next fiscal year because of Rs 280 billion indicated by the finance ministry for PSDP against Rs 486 billion demanded by the ministries and divisions.
The working paper submitted to the APCC said that owing to tightened fiscal space, sufficient funds could not be allocated for some of the critical projects including Diamer Basha and Mangla raising projects. Owing to limited fiscal space, foreign credit requirements or projects such as Chashma Nuclear (C3, C4) Satellite Programme of Suparco can not be fully met.
Adequate rupee cover can not be provided to utilise estimated foreign assistance for FY12, which includes increasing volume of flood reconstruction project assistance. Inadequate funds are available for important security related projects of the interior ministry (Safe City). Funds demanded by Fata, Gilgit Baltistan and Azad Jammu & Kashmir can not be fully met. To complete Mangla Raising Project and impound water during next rainy season Rs 13.0 billion are required, the paper added.
Rupees701 billion PSDP would include Rs 280 billion federal, Rs 430 billion provincial and Rs 10 billion for Earth Reconstruction and Rehabilitation Authority (Erra) with a foreign component of Rs 38.443 billion. Deputy Chairman Planning Commission, Dr Nadeem ul Haq told media after the APCC meeting, "we are trying to convince everybody to minimise new projects and drop 30 per cent completed PSDP projects to complete the mega projects."
Nadeem said as many as 743 projects would be undertaken in the next fiscal year including Rs 148 billion infrastructure and Rs 118 billion for social sector as well as other projects of Rs 14 billion.
Asif Bajwa, spokesman of and Secretary Planning Commission, Sohail Ahmed said that major chunk of foreign funds of Rs 13.4 billion would be for energy sector projects, followed by Rs 6.8 billion for National Highway Authority, Rs 5.8 billion, Rs 4.1 billion for Railway, Rsw1.5 billion for Tax Administration Reform Projects and others. The foreign assistance for the Higher Education Commission (HEC) is expected to be Rs 111 million for the next fiscal year, they added.
The macroeconomic papers presented to the APCC fixed agriculture growth target of 3.4 per cent for FY12 with contribution of major crops (3%), minor crops (2%), livestock (4%), fishery (2%) and forestry (-1%). The industrial sector is expected to grow at 3.1% with projected contributions of mining and quarrying (1%), manufacturing (3.7%), construction (2.5%) and electricity, gas and water supply (1%), respectively.
The growth in services sector is projected 5% for the next fiscal year with contribution of transport, storage and communication (4.5%), wholesale and retail trade (5%) and finance and insurance (0.2%). Revival in the commodity producing sector will support growth in the services sector via rejuvenation of transport and finance sub-sectors, especially after the floods.
Recovery in agriculture and industry will impact the performance of the services sector via improvement in wholesale and retail trade. The projected total investment to GDP ratio is 13.7 percent with fixed investment at 12.1 percent, and changes in stock at 1.6 percent, whereas the national savings is projected to be 13 percent of GDP with the national investment and savings gap at 0.7 percent. The inflation target (CPI) for 2011-12 is set at 13 percent against expected CPI inflation of above 15 percent for 2010-11.