KARACHI: Zakaria Usman, President, Federation of Pakistan Chambers of Commerce and Industry, stated on Friday that an increase in development expenditures by 65 percent was recommended in the shadow budget, but it seemed that size of Federal Public Sector Development Program (PSDP) is declined by 23 percent.
While on other side, development expenditures on Non-PSDP programs including development works by provinces have increased by 392 percent, which is a significant big improvement in development program, he added.
FPCCI shadow budget emphasized on new development initiatives, which is a disparity from traditional approach. He informed that development expenditures outside federal PSDP cover also poverty alleviation fund, Benazir Income Support Program and grants for reconstructions of various projects. However, the major change in development approach is the public sector investment in those new initiatives where infrastructures are required to induce the private investment.
Such initiatives belong to the proposed Kashgar-Gwadar rail link, Gwadar link with the rest of country through motorways and highways and development of energy related projects, he stated. According to the constitution of Pakistan, provinces are responsible for education, health and social development projects.
So, major part of development expenditures in public sector should be spent by the provinces. FPCCI Shadow budget proposed Rs.660 billion for provincial development programs. President FPCCI suggested abolishing or reducing spending on developmental works in public sector commercial entities including National Highway Authority, WAPDA, Pakistan Airlines and Water and Power Division. Such development projects should be established by the private sector investment.
Usman further stated that the badly deteriorated physical infrastructure in Pakistan does not support the economic progress and industrialization. To accelerate investment and industrialization in the country, our government has to develop physical infrastructure of ports, means of transportation, energy and communications.
It is obvious that fiscal space in public sector is not available for these badly needed projects. FPCCI shadow budget suggests that such developmental works should be based on private sector investment. Particularly, foreign direct investment should be promoted for these developmental works on the patterns of Lahore-Islamabad Motorway, he suggested. Furthermore, he stated that government has introduced Greenfield Investment scheme for such developmental projects, but necessary legal framework and administrative measures have not been taken to implement those investment policies till now.
He said that there is no doubt that mega projects are required in the economy. He emphasized that Gwadar-Kashgar railway link, Motorways and linked highways, construction of big dams and energy producing and transmitting networks, and expansion in ports capacity are required at the initial stage of accelerated development process.
These projects will lead the enhanced activities in construction, energy, steel, mining, transport and financial sector. He suggested that vested interests of various groups at national and international levels may be involved in this fast developing process.
FPCCI suggested avoiding from politicizing these economic ventures. It is possible only when we create transparency and liberalization for all stakeholders on competitive basis without discrimination.
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