NHA to face biggest cut in PSDP under govt austerity plan
- By Web Desk -
- Mar 26, 2026
ISLAMABAD: The National Highway Authority (NHA) is expected to face the largest reduction in allocations under the Public Sector Development Programme (PSDP) as part of the federal government’s austerity measures.
The move comes as the government seeks to offset the financial impact of keeping petroleum prices unchanged despite rising global oil prices driven by escalating tensions in the Middle East, particularly the ongoing Iran conflict.
According to sources, the government has proposed a Rs100 billion cut in the development budget to manage mounting fiscal pressures. As a result, the total PSDP outlay for the current fiscal year is likely to be reduced from Rs1,000 billion to Rs900 billion.
The savings generated through these cuts will be redirected towards emergency relief measures and are expected to help contain the fiscal deficit.
Official documents reveal that the NHA’s development budget will see the largest cut of Rs22.33 billion.
Other major reductions include Rs24.92 billion in development budgets for provinces and special areas, Rs8.21 billion for Azad Jammu and Kashmir and Gilgit-Baltistan, Rs6.45 billion for the merged districts of Khyber Pakhtunkhwa, Rs10.17 billion in provincial development allocations, and Rs7.03 billion in parliamentarians’ development funds.
Sector-wise, the cuts include over Rs9 billion in the power sector, Rs12.88 billion in water resources projects, Rs3.21 billion in federal education, Rs4.22 billion in Higher Education Commission (HEC) funding, Rs2.22 billion in IT, Rs1.39 billion for the Ministry of Interior, Rs1.41 billion in federal health projects, Rs2.24 billion in railway development, over Rs1 billion in the defence development budget, Rs1.71 billion for the Revenue Division, and Rs1.62 billion in Housing and Works projects.
Sources said the amount saved through these cuts will be used to subsidize petrol and diesel prices. The funds will be transferred to the Prime Minister’s austerity fund, which is being utilized to provide relief to the public.