AS the combined spending by the federal and provincial governments in the first quarter of current fiscal year remained less than one tenth of the annual allocations, International Monetary Fund on Friday urged Pakistan to spend more on development projects and fully utilize the development budget .The remarks came from IMF Mission Chief Ramirez Ernesto during a meeting with Adviser on Finance Abdul Hafeez Sheikh.
Often the economic experts are seen criticizing the IMF’s loan programme because of the strings attached to it which also slows down the growth process. Nonetheless on the matter of development what Ernesto has stated is absolutely correct as without gearing up the development activities, the country can neither push up its growth rate nor provide sufficient job opportunities to the people. Had there been sufficient development activities over the last three months, the people today would not have been complaining much about the price hike and inflation. During the first quarter, the federal and provincial governments spent mere Rs 140 billion on development against their annual total allocations of Rs 1. 6 trillion. Especially the federal government should start thinking beyond curtailing the fiscal and current account deficits. Without boosting the economic growth, neither the revenue targets can be met nor deficits can be managed. We therefore expect the economic team of the government to review its policy and start releasing amounts for the development projects envisaged for the current fiscal year. Apart from giving emphasis to the rail and road infrastructure projects, the PTI government must prioritize its flagship housing project as this mega initiative alone has the capacity to support and uplift several other industries and turn around the economy. To attract the private investment in this project, it is also important that the State Bank of Pakistan starts revising the policy rate downward. This will also encourage the entrepreneurs to expand their businesses or invest in new ventures, which is vital to spur the economic growth.
