Pakistan likely to boost development budget by PKR 900 billion

The Pakistan government is likely to boost the federal development spending budget, known as the Public Sector Development Program (PSDP), by 81% during the upcoming fiscal year.

The allocated amount will be raised from PKR 1,100 billion to PKR 2,000 billion, sources said on Tuesday.

However, a large portion of the amount will be used for ongoing development projects, with less than 100 new development projects to be included in the next fiscal year, according to the sources.

Amid tight fiscal measures under the International Monetary Fund (IMF) program, the federal-funded Public Sector Development Program had nearly come to a standstill in 2024. Initially, the parliament had approved a PSDP size of PKR 1,400 billion following recommendations of the National Economic Council (NEC).

The PSDP was subsequently reduced to PKR 1,100 billion on the IMF’s demand.

The sources also stated that that 276 projects will be completed in the current year. However, 168 projects will be withdrawn with 650 projects to be kept for the next fiscal year.

Earlier, the finance ministry also issued directives to all the ministries, divisions, departments and autonomous bodies to concede all savings and unspent allocations not expected to be utilized during the current fiscal year by April 30.

The total cost of development projects may also be reduced from PKR 11,000 to PKR 9,000 billion, sources said.

Ministries have submitted their lists of new development projects to the Planning Commission, which is currently reviewing them for their inclusion in the PSDP.

During nine months of the fiscal year, the Planning Commission authorized projects worth PKR 664 billion whereas spending amounted to PKR 399 billion. Of this, the major chunk was authorized for provinces amounting to PKR 156 billion, National Highway Authority PKR 112 billion, Ministry of Water Resources PKR 101 billion, and Power Division PKR 56 billion.