President Islamabad Chamber of Commerce & Industry (ICCI) Ahmed Hassan Moughal has expressed grave concerns over the 26 percent decline in development spending during the first nine months of the current financial year as the government has disbursed only about Rs.449 billion for development projects during first three quarters of 2018-19 compared to Rs.607 billion during the same period of last year.
In a statement issued here on Tuesday, Ahmad Hassan Moughal said that the reduced spending on development works would cause slump in business activities and further slowdown the economic growth of the country.
He said that according to PSDP implementation plan, government should have released 70 percent funds of the annual allocation by the end of March 2019, but it released less than 44 percent of the original allocation of Rs.1030 billion, which would have adverse impact on the economic development of the country.
The enhanced spending on development projects played key role in better growth of business and economic activities, but the trend of declining spending on development works in Pakistan would have adverse impact on business, industry and the overall economy, Ahmad Hassan Moughal added.
The ICCI President said that a World Bank’s Growth Report studying fast growing and emerging economies has also found close nexus between enhanced public spending and better economic growth. He urged that government should control all non-development expenditures and focus on increasing spending on development projects.
He said the enhanced government spending on development works would support the efforts of private sector to promote investment, industrialization, business activities, jobs creation and poverty reduction.
Senior Vice President ICCI Rafat Farid and Vice President ICCI Iftikhar Anwar Sethi said that government should make private sector a partner in the execution of PSDP projects. They said that giving more opportunities to SMEs and emerging businesses to compete for PSDP projects would boost the growth of SME sector and put Pakistan on the path of sustainable economic growth.