Govt ready to launch revised PRSP

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FHM Humayan Kabir
The government is almost ready to launch a revised poverty reduction strategy paper (PRSP) by the end of this month estimating requirement of US$51.08 billion to cut poverty and attain a 6.5 per cent economic growth by FY2011, officials said Friday.
"We've tried to match the present government's election pledges and the new global economic order in the revised PRSP. It will be finalised by the end of this month," member of the General Economic Division (GED) Prof. Shamsul Alam told the FE.
The government in March this year decided to overhaul the country's lone development guideline PRSP, framed by the past caretaker government, in a bid to fulfill its election manifesto and lessen the impact of global economic crisis.
The GED under the planning ministry has revised the three-year PRSP projecting a total public expenditure of $51.08 billion for achieving the targets and goals by FY2011.
It has targeted $37.01 billion income from the domestic sources leaving a $14.07 billion shortfall to attain the goals during the PRSP's three-year implementation period between FY2009 and FY2011.
In the original PRSP, adopted by the caretaker government last year, the resource gap was $9.01 billion against the total public expenditure target of $45.58 billion.
The last caretaker administration framed the second PRSP -- the government's main strategy document for development -- in October last year aiming at boosting economic growth to 7.2 per cent by FY2011.
After overhauling the second PRSP, the planning ministry placed it before parliament in October this year for discussion where many members suggested rationalization of the cost.
"As per the suggestions we have rationalised the total cost at $51.08 billion from the earlier proposed $53.59 billion," Prof. Shamsul Alam said.
A senior GED official said out of $51.08 billion fund, $37.01 billion will be mobilised from the domestic resources -- $29.86 billion earnings from tax and revenue and $7.14 billion from domestic borrowing -- during the PRSP implementation period FY2009-FY2011, he told the FE.
The rest $14.07 billion fund will have to be mobilised through borrowing from the external sources, said the official.
In the revised strategy paper, the economic growth target of 7.2 per cent in the final implementation year 2010-11 has now been cut to 6.5 per cent considering the impact of the global economic meltdown.
Prof. Shamsul Alam said the global economic order has forced us to reduce the growth target to 6.5 per cent from the target of 7.2 per cent set by the original second PRSP.
In the revised PRSP, the government has also set a target to keep the inflation within 6.0 per cent limit both for the current FY2010 and next FY2011.
Besides, it has also slashed the target of fiscal deficit to 4.7 per cent in the final year of PRSP implementation 2010-11.
The domestic borrowing has also been projected lower at 2.3 per cent of GDP in FY2011 from the current fiscal's 3.0 per cent while the external borrowing projected upward at 2.4 per cent of GDP from the current year's 2.0 per cent target.
In the election manifesto, the ruling Awami League promised to bring down poverty rate to 25 per cent from 40 per cent by the year 2013.