The federal government has cut Rs. 100 billion from the Public Sector Development Program (PSDP) to prevent hikes in petrol and diesel prices. The reduction brings the total federal development budget for the fiscal year 2025–26 down from Rs. 1 trillion to Rs. 900 billion.
Federal Minister for Planning Ahsan Iqbal confirmed that all development projects have faced a uniform 10% reduction. Originally, Rs. 1,000 billion was allocated for the PSDP, but after the cut, the revised budget now stands at Rs. 900 billion.
The move, coordinated with the Ministry of Finance, aims to maintain stability in petroleum prices. The International Monetary Fund (IMF), during ongoing economic review discussions, had also recommended curbing non-essential expenditures amid global economic pressures.
Budget utilization has been slow, with only Rs. 361 billion spent on federal development projects in the first eight months—just 36% of the original allocation.
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