Islamabad:
Magado for political considerations and fiscal limitations, the coalition government has proposed a public sector development program (PSDP) of RS1 RS1 for fiscal year 2010-26, a significant cut of the original RS1.4 allocation of RS1.4 billion RS1.4 last year.
The reduced PSDP reflects the prioritization of the government of infrastructure projects, particularly roads, often aligned with the interests of coalition allies. In contrast, funds for education, health, space and atomic energy programs have been reduced.
The PSDP of the previous year was cut in the middle of the year to accommodate energy subsidies and meet the objectives of the IMF program. By 2025-26, assignments for specific Sindh schemes and discretionary projects of parliamentarians have increased, indicating an inclination towards politically strategic spending.
The PSDP 2025-26 book shows government political priorities to appease allies and spend more on roads. He approved the reduced budgets for the atomic space and energy programs of Pakistan, Health and Education, but increased allocations for specific projects of SNDH and the schemes of parliamentarians.
Important assignments for discretionary spending have been proposed in the schemes recommended by parliamentarians, specific Sindh infrastructure projects and an improved assignment for the national road authority. Assignments for water, energy and railroads have been drastically reduced to create fiscal space for politically oriented projects.
Compared to the RS25 billion budget this year for discretionary expenditure in the schemes of parliamentarians, the allocation has been proposed in RS70 billion in the new budget, showing a 172% increase in the middle of the tight fiscal space. The development budget of the Ministry of Defense has also increased by 114% to RS11.6 billion for the new fiscal year.
For the provinces, it has been proposed that the allocations of special areas increase from RS227 billion to more than RS253 billion due to the compulsions of expenses related to the parties of the coalition. Within this, it has been proposed that the allocation for provincial projects increase from RS83 billion to RS106 billion.
The 28% increase in provincial project assignments has been mainly given to address Pakistan Popular Party (PPP) concerns, said a cabinet minister on anonymity.
Pakistan had committed to the IMF that the federal government would not assign funds for the schemes of the provincial nature. However, such a great assignment breaches that commitment and the National Fiscal Pact.
The Budget of the Higher Education Commission is drastically reduced to RS39.4 billion, a reduction of RS21.5 billion or 35%. The cut has been made to create space to spend on infrastructure projects. The budget of the Ministry of Health is reduced to RS14.3 billion, a reduction of RS10 billion.
The supply budget has been reduced from RS24.2 billion to only RS5.4 Billon, a 77% cut compared to the last year. The Pakistan Atomic Energy Commission budget is reduced from RS25 billion to RS781 million, a 96%reduction. An official of the Ministry of Finance said that these entities had self -generated resources and that they did not need important budget allocations.
Currently, 1,071 development projects are being implemented with a total cost of RS13.4 billion. These projects require RS10.2 additional billion for completion, and the Ministry of Planning estimates that it would take more than a decade to all.
The Government has also proposed RS16.2 billion for the Ministry of Information Technology, which is reduced by 32% on this year’s assignment.
The Ministry of Planning declared that PSDP 2025-26 has been formulated under an environment limited by resources, marked by fiscal discipline, but guided by an unwavering approach to development priorities.
He added that it is based on the lessons of the PSDP 2024-25 in progress and the recommendations of several institutional reviews, including those of the Public Investment Management Evaluation framework (PIMA) of the IMF, an exhaustive review has been carried out to prune sick and non-performance projects to focus on priority projects that contribute to national development, economic growth and the framework of Uraan Pakistan.
In the new budget, the government has planned to complete or initiate work in some mega and central national projects. These projects include N25 Quetta-Karachi, which is being financed by increasing oil tax in RS8 per liter.
Other priority projects include the Sukkur-Hyderabad M-6 highway, the DASU Hydro Power project, which includes evacuation, Diamer Basha Dam Projects, Mohmand DAM, K-IV and Karachi water increase projects, supply of power to Allama Iqbal Industrial City, Karachi and Islamabad It Parks.
The government has also included the income project funded by Pakistan funded by the World Bank in its priority list, which is considered a failed project.
The Ministry of Planning declared that, among other priority projects, there are the reconstruction of houses and schools damaged in Sindh in floods, Restruction Program after the 2022 flooding in Baluchistan, rail connectivity of the Thar coal, Cancer Hospital in Islamabad, National Program of the Prime Minister for the Control of Hepatitis ‘C’ and diabetes.
The document showed that the government has reduced the allocation of water projects of RS185 billion to RS133.5 billion, a cut of RS52 billion compared to last year. It also cut the allocation of the RS35 billion railway ministry to RS22.5 billion, a 37%reduction.
The allocation of the electricity sector development budget is reduced from RS105 billion to RS90 billion, a 28%reduction. However, the NHA budget increases from RS161 billion to RS227 billion, a jump from RS66 billion or 41%.
The NHA budget has increased to finance the main infrastructure projects. Among the priority road schemes are expanding and improvement of N-5 (phase-i), Mashkhel Panjgur Road and East Bay Expressway Phase-II in Gwadar.
Strategic advances in space science are also prioritized through the manned space mission of Pakistan and the Pakistan lunar exploration rover, according to the Ministry of Planning.
