ISLAMABAD: Federal Minister for Planning, Ahsan Iqbal, has revealed that the Public Sector Development Programme (PSDP) may undergo further budget reductions, with an additional cut of Rs200 to Rs400 billion looming.
Ahsan Iqbal attributed this potential reduction to Pakistan’s persistent economic difficulties, stating that the current development budget falls short of addressing the nation’s requirements.
He noted that any increase in budget allocation would necessitate imposing further taxes, which the public is currently unable to bear. As a result, the development budget has already been reduced from Rs1,400 billion to Rs1,100 billion, with further cuts now being considered.
The minister is awaiting a final decision from the Ministry of Finance on the matter. He emphasized that the government’s focus will remain on continuing externally funded projects, completing China-Pakistan Economic Corridor (CPEC) initiatives, and prioritizing other key national projects.
Iqbal also mentioned that discussions with China on the ML-1 railway project have concluded, with significant advancements expected this year. The decision regarding whether ML-1 will be completed in two or four phases remains under discussion.
Earlier, during a Senate Standing Committee on Planning meeting chaired by Quratulain Marri, Ahsan Iqbal briefed the committee on the current situation. He pointed out that the IMF’s conditions have placed a heavy burden on the public, with no concessions offered. The most significant impact of the current economic conditions has been the reduction of the development budget from Rs1,400 billion to Rs1,100 billion.
Iqbal cautioned that an additional cut of Rs200 to Rs400 billion is possible, which has already delayed the release of development funds for the first quarter of the current fiscal year. However, he expressed optimism that if the government successfully implements reforms over the next two to three years, Pakistan could witness substantial progress.
