The government is likely to drop around 90 percent of proposed new development projects in the upcoming budget due to funding constraints, as differences emerge between the Ministry of Finance and the Ministry of Planning over next year’s development outlay.

The Ministry of Planning had proposed allocating Rs. 3,000 billion for development spending in fiscal year 2026-27, which would be up to four times higher than the allocation for the current fiscal year. However, the Ministry of Finance has rejected the request, according to sources.

More than 300 new development projects have been submitted by various ministries and divisions for the next fiscal year, with a combined estimated cost of around Rs. 7,000 billion, sources said.

However, officials said only about 10 percent of these new projects, mainly those considered high priority, are likely to be included in the Public Sector Development Programme, effectively leaving out the vast majority of proposed schemes.

The government is now considering focusing on the completion of ongoing projects instead of adding a large number of new schemes to the federal development portfolio.

At present, around 1,100 development projects are under implementation under the federal programme, with a total estimated cost of about Rs. 13,000 billion. By the end of the current fiscal year, nearly Rs. 4,000 billion is expected to have been spent on these projects.

Officials said the remaining financial requirement, or throwforward, stands at around Rs. 10,000 billion, adding significant pressure on future budgets and limiting the government’s ability to accommodate new development spending.

In the current fiscal year, more than Rs. 450 billion has already been spent on development projects between July and April. Out of the total PSDP allocation of Rs. 837 billion, around Rs. 370 billion more is expected to be spent in May and June.