Pakistan has reduced its development budget by Rs. 100 billion, bringing the Public Sector Development Program (PSDP) down from Rs. 1 trillion to Rs. 900 billion as part of efforts to maintain stability in petrol and diesel prices. The decision reflects the government’s attempt to manage financial pressures while avoiding an additional burden on the public through fuel price hikes.
The reduction was implemented through a uniform 10% cut across all development projects following consultations with the Ministry of Finance. This step comes in the context of broader economic challenges and aligns with recommendations from the IMF to control public spending and maintain fiscal discipline.
Officials have stated that the primary objective of this move is to strike a balance between limited financial resources and the need to keep fuel prices steady. However, concerns remain as overall development spending continues to fall short of targets, largely due to slow fund utilization and ongoing budget constraints.
