1. DEVELOPMENT STRATEGY

• The development strategy of AJK has been designed to focus on:
  
  
  • Improvement and upgradation of socio-economic infrastructure.
  • Natural resource management through participatory approach involving the beneficiaries/communities for the purpose of income generation and poverty alleviation.
    
  
  
  
• 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.



• 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 would be achieving the objective of Universal Primary Education in both male/female in the near future. The present literacy rate is over 65%.



• 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 would be achieving the objective of Universal Primary Education in both male/female in the near future. The present literacy rate is over 65%.



• In the urban areas approximately 80% population has been provided piped water supply whereas an estimated 73% 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 10876 km. road length of which 4760 km. are metalled while the rest are fair weather roads. The density of road works out to be 0.31 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 in AJK, which caters for the needs of the people of AJK.



• Rural electrification has also been one of the major areas of thrust and almost 72% population of the area has fully or partially been provided electricity while 100 % population of AJK would be provided electricity by the year 2007. Per capita power availability in AJK is 335 KW/H. On the other hand, AJK has a potential of over 5000 MW of Hydel power and efforts are underway to generate Hydel power not only for AJK but to produce more power for supply to Pakistan.



• A package of incentives developed few years back has created a conducive climate for industrial investment for intending investors. Few small industrial estates were also established. About 968 industrial units (small/medium) have been established in the area. Many important minerals are also found in AJK and the state corporation AKMIDC is undertaking studies to ascertain the potential for exploitation on commercial basis.



• In Agriculture, emphasis has been on diversification of cropping patterns from annual to perennial and conventional to cash crops. Increasing population has exerted immense pressure on forest resources and efforts are directed to reforest denuded areas and rehabilitate severely eroded ones. The commercially exploitable timber could not be exploited fully due to lack of financial resources and inaccessibility to the rich forest areas.

  2. PLANS ALLOCATION & UTILIZATION:

• Despite an encouraging scenario as outlined in the preceding paragraphs the level of social and physical development in AJ&K has remained far short of actual requirements of the people and its economic potentials. 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:-
  
  

* 9th Five Year Plan could not be approved by the Government of Pakistan and funds were allocated on year-to-year basis.

** The Government of Pakistan decided to abandon the Ten Year Perspective Plan and approved a new 5 years Medium Term Development Framework (MTDF 2005-10).

  3. SALIENT FEATURES OF PSDP 2005-2006 (REVISED) AND 2006-2007 (ESTIMATES)

• 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 revised PSDP for the current year i.e. 2005-2006 was Rs. 5100.000 million including foreign assistance of Rs. 1190.840 million. An amount of Rs. 6.000 billion have been allocated for the Public Sector Development Programme of AJK for the year 2006-2007 including local component of Rs. 5423.000 million and foreign assistance component of Rs. 676.000 million. The overall increase in current year’s allocation comes to 17.6%.

• While making sectoral/schemewise allocations following strategy has been adopted to ensure timely completion of ongoing projects as well as to fulfill the commitments with donors against foreign funded projects:-

• Foreign Aided projects have been given due share while making Inter/Intra sectoral allocation, in order to fulfill the commitments with the donors.

• Priority has been assigned to on-going projects by allocating 95% of funds (Rs: 5728.561 million).

• Schemes at advanced stages of implementation with expenditure of 80% and above have been given the balance provision for their completion during 2006-07.

• The on-going schemes with expenditure of 50% and above have been given allocation as per phasing/requirements.

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

• After making allocation for on-going projects in the light of above, Rs. 271.439 million have been allocated for some very important new schemes.
• Inter-District equity has been kept in view as far as possible while making allocations to the development schemes.

• All the reconstruction activities in the earthquake affected areas are to be financed from ERRA funds, hence all ongoing projects of building reconstruction component have not been given any allocation in ADP 2006-07.

• Only token provision has been made in the ADP 2006-07 for ongoing projects of roads and bridges which are included in ERRA programme.



• 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:-



• Mass IT Literacy and Awareness;
• Infrastructure development for Software Development and
• E-Governance through Computerization.


• In view of the resource position, 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 2005-06 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 erosion.



• The Revised Estimates 2005-2006 and Budget Estimates 2006-2007 in terms of local and foreign components are presented in 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 beneficiary of development allocations. The LG&RD Sector is the next highest recipient of PSDP allocation followed by Foreign Aided Projects, Power, Education, PPH, Health, Agriculture, Information Technology and Industries 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 new financial year. 2) Releases of funds will be made promptly on the basis of approved allocation 3) ADP quarterly review meetings will be held to monitor the utilization progress and 4) The intra-sectoral re-appropriation will be made towards sectors showing better performance in terms of utilization.



• Under the Federal PSDP a sum of Rs. 9921 million has been allocated for 60 projects in AJK during the year 2006-07. In addition AJK has also been given due share in most of the umbrellah projects, spread over all provinces and special areas.

Comparison of Revised PSDP Allocations for the Year 2005-06 and Budget Estimates for 2006-2007

  4. Funds are provided for 704 On-going and 129 new projects of the PSDP 2006-2007. In the PSDP of 2005-2006 under the portfolio of on-going projects 110 have been completed while 183 projects are expected to be completed by June, 2007.