Govt Cuts Development Budget by Rs. 100 Billion to Keep Petrol, Diesel Prices Steady

The federal government has reduced the development budget to avoid increasing petroleum product prices. A cut of Rs. 100 billion has been made in the Public Sector Development Program (PSDP), bringing the federal development budget down from Rs. 1 trillion to Rs. 900 billion.

Federal Minister for Planning Ahsan Iqbal confirmed the reduction in the PSDP. He said a 10 percent cut has been applied across all development projects.

Initially, Rs. 1,000 billion was allocated for the PSDP in the fiscal year 2025–26, but after the cut, the revised budget now stands at Rs. 900 billion.

The decision to reduce the development budget was taken to keep petroleum prices unchanged, in consultation with the Ministry of Finance. The International Monetary Fund (IMF), during ongoing economic review talks, had also urged the government to control non-essential expenditures amid global tensions.

Meanwhile, the utilization of the development budget has also remained slow. During the first eight months of the current fiscal year, only Rs. 361 billion has been spent on federal development projects, which is just 36 percent of the total allocated budget.