PSDP likely to be cut by an additional Rs 400 billion

Federal Planning Minister Ahsan Iqbal said the Public Sector Development Program (PSDP) may face further cuts, with the budget potentially reduced by an additional 200 to 400 billion rupees.

In an interview with Express NewsAhsan Iqbal explained that due to Pakistan’s ongoing economic challenges, the current development budget is insufficient to meet the country’s needs.

He noted that increasing the budget allocation would require the imposition of additional taxes, which the public cannot afford at this time. Consequently, the development budget has already been reduced from 1,400 billion to 1,100 billion rupees, and further reductions are now likely.

The minister sought a final clarification from the Finance Ministry on the matter, stressing that the government’s priority will be to continue the projects funded from external sources, complete CPEC projects with the development budget and focus on other projects of national interest.

Iqbal also reported that discussions with China on the ML-1 project have been finalized, with significant progress expected this year. The decision on whether ML-1 will be completed in two or four phases is still under discussion.

Earlier, during a meeting of the Senate Standing Committee on Planning, chaired by Quratulain Marri, Ahsan Iqbal briefed the committee on the current situation. He pointed out that the IMF’s conditions have put a significant burden on the public and the IMF has shown no willingness to offer concessions. The biggest cut in the current economic situation has affected the development budget, which has already been reduced from 1,400 billion to 1,100 billion rupees.

Iqbal warned that there is a risk of an additional cut of 200 to 400 billion rupees in the development budget, which has delayed the release of development funds for the first quarter of the current fiscal year. He expressed the hope that if the government successfully implements the reforms in the next two to three years, Pakistan will witness significant progress.