Plan for 7pc GDP growth finalised

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News Update:

Plan for 7pc GDP growth finalised




By Ihtasham ul Haque

ISLAMABAD, May 9: The government has finalised a five-point plan to achieve 7 per cent GDP growth in the next budget, which is estimated to be of Rs1.5 trillion. “Our new budget strategy is to de-regulate the economy further by effectively promoting the private sector, creating special economic zones and industrial parks, offering more incentives to the Small and Medium Enterprises and creating special estates for developing the agriculture sector,” the Prime Minister's Adviser on Finance Dr Salman Shah told Dawn on Wednesday.

In fact, he said, the focus of the next five budgets will be on achieving the five point strategy for which substantial funding will be made available, including from external resources.

“In real terms, over 7 per cent GDP growth has been planned during the next financial year,” he said.

There will be a 4 per cent fiscal deficit target in the budget 2007-08 to be achieved by maintaining strict fiscal discipline, he said.

The CBR revenue will be Rs1 trillion while the Public Sector Development Programme (PSDP) has been estimated to be Rs535 billion, an increase of Rs100 billion over the current budget of Rs435 billion, the adviser said.

Mr Shah said that since the fiscal deficit target for the next financial year had been estimated at 4 per cent, Rs60 billion foreign borrowing will be required in the new budget. “Rest of the 96 per cent financial resources will be arranged by the government and I find no difficulty in this behalf,” he said.

The target for inflation in 2007-08 is 6 per cent. “But for the current year, 7 per cent inflation rate is being expected by June 30 this year against the target of 6.5 per cent.” For medium term, he said, the government was hoping for 5 per cent inflation during 2007-08, Mr Shah said.