Pakistan to 'increase' development budget by Rs900 billion in next FY

Pakistan is likely to increase the development budget by Rs900 billion in the upcoming Fiscal Year 2025-26, ARY News reported on Wednesday, citing sources.

As per details shared by sources, the federal development budget it is proposed to raise the Public Sector Development Programme (PSDP) allocation from the current Rs1,100 billion to Rs2,000 billion.

Sources indicate that the increased allocation will be utilised to complete ongoing development projects under the Rs2,000 billion development outlay. Fewer than 100 new development schemes are likely to be included in the upcoming budget, the sources added.

This fiscal year, 276 projects are expected to be completed, while 168 schemes will be excluded from the PSDP.

For the next fiscal year, approximately 650 projects are expected to be accommodated under the PSDP.

The overall cost of development projects is anticipated to reduce from Rs11 trillion to Rs9 trillion. Ministries have submitted lists of new development projects to the Planning Commission, which is currently reviewing them for potential inclusion in the PSDP.

Earlier sources said, the federal government has decided to implement strict austerity measures in the upcoming budget to meet the International Monetary Fund’s (IMF) conditions by reducing the development budget.

The focus would be on completing ongoing projects, with only a few new initiatives of utmost importance being included, the sources said.

They added that the Ministry of Planning has sought Rs 3 trillion from the Ministry of Finance under the development budget in the next fiscal year (2025-26).

“The Finance Ministry has not committed to providing the full amount,” the sources added.