ISLAMABAD – The federal government will present the budget for fiscal year 2025–26 on June 2, just days before Eid ul Azha, Planning Minister Ahsan Iqbal announced at a press conference on Friday.

The government has set an allocation of Rs921 billion for the Public Sector Development Program (PSDP), marking a 16% cut from the revised Rs1.1 trillion allocated for the current fiscal year. Although the Planning Commission had proposed a significantly higher amount of Rs2.9 trillion based on the consolidated demands of various ministries, the Ministry of Finance approved an Indicative Budget Ceiling (IBC) of only Rs921 billion.

Iqbal expressed concern over the reduced allocation and said he would push for an increase to at least Rs1.6 trillion to secure Rs700 billion in rupee cover for foreign-funded development projects.

So far, Rs900 billion has been authorized for release under the ongoing year’s PSDP, with additional disbursements expected over the remaining months of May and June.

The Annual Plan Coordination Committee (APCC) is set to meet on May 23 to finalise the development framework, while the National Economic Council (NEC) is expected to approve macroeconomic targets and the PSDP by May 26 or 27.

Due to the tight budget ceiling, provincial schemes included in the PSDP will see significant reductions, and around 200 projects that have shown limited progress will be discontinued altogether to ensure better resource allocation.