Islamabad (Mudassir Ali Rana) – The federal government is reportedly considering a Rs 300 billion reduction in the current fiscal year’s Public Sector Development Programme (PSDP).
According to details this cut would slash the national development budget by about 30 percent, from Rs 1,000 billion to Rs 700 billion.
According to sources in the Planning Commission, the proposed cut is being discussed in light of lower-than-expected revenue collection and the government’s effort to meet the primary balance target under fiscal consolidation measures.
Officials said that reducing the size of the PSDP could lead to funding cuts for several key national projects, potentially affecting infrastructure development and ongoing public works.
Initially, the government had allocated Rs 1,400 billion for the PSDP in the current fiscal year. However, due to mounting financial pressures, the proposed development outlay may now be reduced by Rs 400 billion.
In comparison, during the previous fiscal year, the government spent Rs 1,096 billion on development projects. If the current proposal is approved, development expenditure this year could fall to around Rs 700 billion, reflecting a significant slowdown in federal development spending amid fiscal constraints.
Economic analysts warn that such cuts could hamper growth prospects, delay major infrastructure projects, and impact employment opportunities tied to public sector development.