The federal government is considering a substantial reduction in the Public Sector Development Program (PSDP).

Sources told Raised by Numbers that the proposed cuts could range from Rs. 400 million to Rs. 700 billion.

Beyond the PSDP cuts, the government plans to generate an additional Rs. 1,100 billion.

Furthermore, provincial governments will be asked to contribute Rs. 1,500 billion. The combined total of Rs. 3 trillion—comprising Rs. 400 billion from the PSDP, Rs. 1,100 billion from the federal government, and Rs. 1,500 billion from the provinces—will be allocated to settle circular debt and capacity payments.

The prime minister has directed the Ministry of Finance and the Ministry of Energy to finalize the plan. However, it is noteworthy that the government has yet to consult the International Monetary Fund (IMF) regarding this proposal.

Once the plan is finalized and receives the prime minister’s approval, the government is expected to seek the IMF’s endorsement before proceeding with implementation.