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Public Sector Development Programme 2007-08

General

Azad Jammu & Kashmir is spread over an area of 13,297 sq. kilometers. The topography is mainly hilly and mountainous with valleys and stretches of plains. The climate is sub-tropical highland type with an average yearly rainfall of 150 cm. The elevation ranges from 360 meters in the South to 6139 meters in the North, the highest feature is Sarwali Peak with an altitude of 20750 feet asl.

Based upon the population census of 1998 and taking into account the annual increase, the current population is estimated at 3.513 million with roughly 88% living in rural areas. Population density is 270 per sq. km. against 187 in Pakistan. Northern AJ&K being mostly mountainous is economically under developed. Some areas have inadequate infrastructure and population is mostly dependent upon the rural economy & remittances from abroad. Land holdings are small with 0.246 hectare per capita and the cultivated area is only 13% of the total geographical area. About 42% of the area is under the administrative control of the Forest Department of which approximately 11% is commercially exploitable.

At the time of liberation present area of the AJ&K was most under developed part of the State of Jammu & Kashmir and it remained as such till mid fifties when economic and social development process was launched through development plans. Despite financial constraints, efforts have been made to provide sound base for rapid socio economic development of the area.

Vision 2012

The Government of Azad Jammu & Kashmir approved the Vision 2012 on 30th May, 2007; “Plan and embark AJ&K upon the path to help the people of AJ&K become highly educated, skilled, fully employed, prosperous and a happy population by providing efficient and financial resources to develop the latent economic opportunities utilizing local resources”. In line with this vision all departments have prepared medium term (2007-12) sectoral plans highlighting their mission and strategic direction which would be followed to achieve the President of Pakistan’s Vision “Build Back Better” for earthquake rehabilitation and the Prime Minister of AJK’s vision “Green and Skilled Kashmir”

The consistency of economic policies, good governance, development of physical, social and technological infrastructure, raising of an educated, skilled and enlightened working class with emphasis on participatory  natural resource management.   To translate this Vision into reality comprehensive sectoral programmes and plans have been formulated to exploit our potentials in hydel, mineral, water, agriculture, tourism, and IT to boost economic growth. Our focus is on development of human capital through skill enhancement training and invest in green sectors to alleviate poverty through trickle down effect.

The objectives, goals and targets of the vision would be achieved by seamless integration of resources available from Annual Development Plan, Federal PSDP, Donors, International Development Agencies and Foreign Direct Investment.  

Rehabilitation & Reconstruction Programme

The Reconstruction and Rehabilitation Programme has been launched at full swing in 5 earthquake hit districts of AJ&K. Under Reconstruction and Rehabilitation Programme an amount of Rs. 32.271 billion has been disbursed to affectees as housing subsidy whereas payment of Rs. 2.5 billion was made against livelihood cash grant. Almost 98% affectees have now permanent /semi permanent shelters, whereas about 70% affectees have started reconstruction of their houses. During the year 2006-07, 540 projects of Educational Institutions costing Rs. 6382.034 million have been approved whereas 381 institutions have been handed over to National/International NGOs for reconstruction. Under Health Sector schemes costing Rs. 917.598 million have been approved and reconstruction work of 125 schemes has been allocated to National and International Sponsors. The rehabilitation/reconstruction work of 208 KM roads worth Rs. 798.4 million has been launched whereas the projects costing Rs. 695 million have been started under Power Sector. The work has also been commenced on 624 schemes costing Rs. 198 million in Water and Sanitation Sector. The projects of Environment Sector worth Rs. 13.562 million are under implementation. The master plans of Muzaffarabad, Bagh and Rawalakot cities have been finalized while the micro planning of these cities is in progress. The work on reconstruction of District Offices Complex Muzaffarabad has been started with financing from Turkish Government, while work on District Headquarter’s complexes at Bagh and Rawalakot will take off soon.  During the year 2007-08 about Rs. 19 billion have been proposed to be spent on reconstruction & rehabilitation activities of different sectors in Earthquake affected areas of AJ&K.

Development Strategy

The development strategy of AJK has been designed to focus on:

  1. Improvement and upgradation of socio-economic infrastructure.
  2. Natural resource management through participatory approach involving the beneficiaries/communities for the purpose of income generation and poverty alleviation.
  3. Education given high priority to achieve Universal literacy in line with MDGs.
  4. Almost 2-folds increase in allocation for Productive Sectors to achieve self reliance and increase in income and revenue for private and public sectors.
  5. Greater emphasis on IT expansion through crash computer literacy programme.
  6. Electricity for all by 2008.
  7. Clean drinking water for all by 2012.
  8. Capacity building and skill enhancement of service providers and communities for gainful employment.

Socio-Economic Development Situation.

Until recently centralized Planning & Development has been the mainstay of Public Sector Development Plans but it has been observed that the rate at which benefits of development initiatives trickled down to grass root level was dismal, thus realizing the weakness of development strategy, the Government of AJK has reoriented its policy by shifting its emphasis towards participatory approach by involving the communities in assessment of their needs, planning, implementation and O&M of the development schemes. Accordingly AJ&K Rural Support Programme has been established to institutionalize the beneficiaries involvement at grass root level at all stages of development.

Since at the time of liberation physical and social infrastructure was almost non-existent, the efforts over the decades, were focused on building the requisite infrastructure and priority was assigned to Transport & Communication and Education sectors and major portions of development funds and revenue budget were allocated to these sectors. As a result the AJK had achieved over 65% of literacy rate and established extensive road network covering from North to South. 

Health has been another priority sector and at least one Basic Health Unit has been provided at the level of Union Council. However, the level of specialized health services in the area are not satisfactory because there is only one bed for 2092 persons in AJK as compared to a bed for 1310 at National level. However, EPI coverage in AJK is well over 89%. To improve the health facilities in the area, the Health Sector infrastructure is being upgraded and more facilities are being added.

In the urban areas approximately 74% population has been provided piped water supply whereas an estimated 65% rural population gets water supply facilities through stand posts. The rural water supply is managed by the Local Government & Rural Development Department through community participation where entire operation & maintenance cost is born by the users.

Azad Jammu & Kashmir has made commendable quantitative improvement in its road communication network with 10968km. road length of which roughly 5500 km. are metalled while the rest are fair weather roads. The density of road works out to be 0.41 km. per square km. It is to be mentioned that mass transportation of the passengers and goods in Azad Kashmir is entirely through roads which require huge investment for construction and maintenance. Besides an effective telecommunication network has been set up by the Special Communication Organization to cater for the needs of the people of AJ&K. The private mobile companies have also come in big way which has resulted in tremendous increase in number of cell phone users.

Rural electrification has also been one of the major areas of thrust and almost 84% population of the area has been provided electricity while 100 % population would be covered by 2008. Per capita power availability in AJK is 326 KW/H. AJ&K has a potential of over 5000 MW of hydel power generation and efforts are underway to generate hydel power not only for local use but also to cater to the need of Pakistan.

Many precious minerals and stones are found in AJ&K and AKMIDC has undertaken studies for exploitation on commercial basis. For skill enhancement AJK Technical Education and Vocational Training Authority (TEVTA) has also been established. All High & Higher Secondary Schools have been converted in to Vocational Training Centres by introducing technical education classes in afternoon. Skilled Kashmir is the ultimate goal of the Government.

In Agriculture, emphasis has been on diversification of cropping patterns from annual to perennial and conventional to cash crops. Tea, Olive, off season vegetables and commercial fruits production projects are being launched to increase farm income. Increasing population has exerted immense pressure on forest resources and efforts are directed to reforestate denuded areas and rehabilitate severely eroded ones.   Efforts are underway to implement the AJK Government’s Green and Skilled Kashmir Programme through mass afforestation and year 2007 has been declared by the government Green year.

Being the backyard of the country with very small industrial base, AJK has been investing more in developing human capital through expansion of education and health facilities and in this endeavor, at times, has heeded less for quality of delivery of these services. However, the prime objective of development in future under social sectors would be to concentrate on quality.

PSDP Allocation & Utilization:

Despite an encouraging scenario as outlined in the preceding paragraphs the level of social and physical development in AJ&K remains far short of actual requirements of the people and its economic potentials could not be fully explored. AJ&K has been entirely dependent upon Government of Pakistan for the financing of its development outlays. Development funds made available over the years to AJ&K by the Government of Pakistan are as under:-

Million Rs.


S.No

Year

ADP Allocation Utilization %age utilization

1.

2001-02

2466.641 2401.099 97

2.

2002-03

3300.000 3059.966 93

3.

2003-04

3830.000 3493.793 91

4.

2004-05

4603.000 4181.683 91

MTDF 2005-10 Allocation      

5.

2005-06

5100.000 5100.000 3994.685 77

6.

2006-07

6620.000 6000.000 - -

7.

2007-08

8130.000 7800.000 - -

Salient Features

The financing of AJ&K Public Sector Development Programme is totally dependent on the development grant/loans provided by the Government of Pakistan. The size of the PSDP 2006-07 was Rs. 6000.000 million including foreign assistance of Rs. 676.000 million. An amount of Rs. 7800.000 million has been allocated for the PSDP 2007-08 including local component of Rs. 6992.000 million and foreign assistance component of Rs. 808.000 million. The overall increase in current year’s allocation works out to be 30%. While making sectoral/scheme-wise allocations following guideline has been adopted;

  1. Foreign Aided projects have been given due share while making Inter/Intra sectoral allocation, in order to fulfill the commitments with the donors.
  2. Priority has been assigned to on-going projects by allocating funds amounting to Rs. 6721.377 million.
  3. Schemes at advanced stages of implementation with expenditure of 80% and above have been given the full balance provision for their completion during 2007-08.

(iv)      Other on-going schemes have been adequately funded keeping in view the available resources.

  1. After catering to the requirement for on-going projects, Rs. 1078.623 million have been allocated for some high priority new schemes.
  2. Inter-District equity on the basis of population and area, has been kept in view as far as possible while making allocations to the development schemes.

The Azad Jammu & Kashmir with a literacy rate of more than 65% and having limited opportunities in the Agriculture sector alongwith small industrial base is exploring other opportunities to utilize its vast human resource for economic development of the region. Encouraged and guided by the IT policy of the Government of Pakistan, the AJK Government has decided to use Information Technology and train its manpower to achieve the goal of economic development. For this the AJK Government has prepared a master plan focusing on three key areas:-

  1. Mass IT Literacy and Awareness;
  2. Infrastructure development for Software Development and
  3. E-Governance and E-Business through IT expansion.

Similarly to enhance skills of the youth for gainful employment AJ&K TEVTA has been established.
In view of the limited resource, we have been restricted to concentrate on ongoing projects/programme with a view to avoid thinning of resources and exceedingly expensive time and cost over runs. The Sectoral allocations have been made on need basis vis-à-vis the utilization performance during the year 2006-07 and Social Sectors requirements, which will hopefully enable the sectors to continue their development activities. Similarly, an effort has been made to protect foreign assisted projects/programme against any serious resource constraint.

The Revised Estimates 2006-07 and Budget Estimates 2007-08 in terms of local and foreign components are presented at Table-1. It can be seen that Transport & Communication sector by virtue of roads being the only mode of transportation of passengers and goods is major recipient of development allocations. The Power Sector is the next highest in the order of PSDP allocation followed by Foreign Aided Projects, LG&RD, Education, PPH, Health, Agriculture, Information Technology and Industry sectors.

To ensure efficient utilization of the allocated funds;

  1. Efforts will be made to approve all new projects with in the 1st four months of the next financial year.
  2. Up front releases of funds will be made in July 2007 on the basis of approved allocation.
  3. Quarterly review meetings will be held to monitor the utilization progress.
  4. The intra-sectoral re-appropriation will be made towards sectors showing better performance in terms of utilization.
  5. Effective Monitoring & Evaluation will be carried to ensure transparent and optimal resource utilization.

Under the Federal PSDP a sum of Rs. 33831.113 million has been allocated for 58 Umbrella projects and exclusive projects for AJK during the year 2007-08.

Comparison of Revised PSDP Allocations for the Year 2006-07 and Budget Estimates for 2007-08

Sr. No. Name of Sector Budget Estimates 2006-07 Revised Estimates 2006-07 Budget Estimates 2007-08

%age

% Incr./Decr.

Local F. Aid Total Local F-Aid Total Local F-Aid Total
1 Transport & Communication 1902.000 0 1902.000 2053.710 0 2053.710 2510.000 0 2510.000 32.18 22

2

Power

675.000 0 675.000 930.000 0 930.000 1120.000 0 1120.000 14.36 20

3

Foreign Funded Projects

300.000 462.000 762.000 280.000 467.963 747.963 300.000 603.000 903.000 11.58 21

4

Local Govt. & Rural Dev.

650.000 200.000 850.000 754.500 200.000 954.500 700.000 200.000 900.000 11.54 .6

5

Physical Planning & Housing

553.000 0 553.000 507.684 0 507.684 640.000 0 640.000 8.21 26

6

Education

480.000 0 480.000 480.000 0 480.000 532.000 0 532.000 6.82 11

7

Health

244.000 14.000 258.000 144.432 8.037 152.469 332.000 5.000 337.000 4.32 121

8

Forestry/Fisheries

205.000 0 205.000 205.000 0 205.000 270.000 0 270.000 3.46 32

9

Information Technology

100.000 0 100.000 99.000 0 99.000 168.000 0 168.000 2.15 70

10

Agriculture

47.000 0 47.000 42.300 0 42.300 110.000 0 110.000 1.41 160

11

Sports

70.000 0 70.000 73.000 0 73.000 100.000 0 100.000 1.28 37

12

Industries/Minerals

62.000 0 62.000 106.234 0 106.234 90.000 0 90.000 1.15 -15

13

Tourism

15.000 0 15.000 12.500 0 12.500 50.000 0 50.000 0.64 300

14

Research & Development

5.000 0 5.000 21.640 0 21.640 25.000 0 25.000 0.32 16

15

Social Welfare

15.000 0 15.000 13.000 0 13.000 25.000 0 25.000 0.32 92

16.

Environment

1.000 0 1.000 1.000 0 1.000 20.000 0 20.000 0.26 1900

Total PSDP

5324.000 676.000 6000.000 5724.000 676.000 6400.000 6992.000 808.000 7800.000 100 22

Overall throwforward of PSDP has increase to Rs. 32039.000 million in lieu of heavy cost escalation specially after earthquake of October 2005.  Sectoral break-up is given as under:-

Sector-Wise Throw-forward of Current PSDP 2007-08

S.No.

Name of Sector

Total Cost

Expenditure ending 6/2007

PSDP 2007-2008

Throwforward beyond
2007-2008 (Rs.  Million)

1.

Transport & Communication

18593.789 7247.671 2510.000 8836.118

2.

Power

10791.651 6714.592 1120.000 2957.059

3.

Foreign Funded Projects

9136.060 864.955 903.000 7368.105

4.

Local Govt. & Rural Dev.

4487.155 3012.875 900.000 574.280

5.

Physical Planning & Housing

4655.738 1578.884 640.000 2436.854

6.

Education

5866.979 196ss0.726 532.000 3374.253

7.

Health

1942.268 868.415 337.000 736.853

8.

Forestry/Fisheries

2384.728 589.785 270.000 1524.943

9.

Information Technology

934.780 207.628 168.000 559.152

10.

Agriculture

2193.793 173.872 110.000 1909.921

11.

Sports

930.001 410.348 100.000 419.653

12.

Industries/Minerals

925.174 372.566 90.000 462.608

13.

Tourism

453.173 42.844 50.000 360.329

14.

Research & Development

306.816 35.121 25.000 246.695

15.

Social Welfare

231.289 32.807 25.000 173.482

16.

Environment

122.474 3.779 20.000 98.695

Total :-

63955.868 24116.868 7800.000 32039.000
 
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