Finance advisor says govt performance below par

ISLAMABAD: Performance of the government in the last two years has not been good enough and there was a need to lessen the volume of public sector borrowing, Finance Adviser Abdul Hafiz Sheikh said during a press briefing here today.

The Economic Survey 2009-10 showed that the rate of Gross Domestic Product (GDP) was at 4.1 percent compared to 1.2 percent the previous fiscal year.

The achieved target is still far below the desired level given the population growth rate of two percent and labour force of around three percent, the sources added.

Inflation is undoubtedly less severe as compared to last year's 22 percent but is still in double digits at 11.5 percent.

Keeping the fiscal deficit low given the security situation, debt repayments and making robust development expenditure to overcome social and infrastructure imbalances and moving towards sustainable and inclusive development, still remains a daunting task.

Despite economic difficulties, the government has made determined efforts to protect the poor and the vulnerable and its overarching objective has been to ensure stabilisation with a human face.

Social protection measures were expanded from around Rs 8 billion two years ago to around Rs 80 billion this year. Direct income support for the poor and needy has been provided mainly through the Benazir Income Support Programme, which in 2009-10 was expanded to cover 5 million families, though actual coverage may be somewhat less, it is still substantive.

Provincial governments have also launched programmes to provide income support, food subsidies and job opportunities for the poor and needy.

Implementation of the 7th National Finance Commission Award and 18th Amendment will require that the federal and provincial governments work in close harmony to ensure that the growth dividend as a result of these changes is fully realised.

The coming year also marks the start of the 10th Five-Year Plan (2010-15), which will provide an overall medium-term policy and development framework to achieve the objective of sustained and pro-poor growth and equitable development.

Main features of the economic performance during the current year are; economic growth in 2009-10 is provisionally estimated at 4.1 percent, higher than the targeted growth of 3.3 percent. This was mainly due to a sharp bouncing lack of large-scale manufacturing (4.4 percent) pushing up industrial growth to 4.9 percent, which triggered robust growth in services of 4.6 percent.