ISLAMABAD: In a fresh blow to public sector development, the federal government has reduced the development budget by an additional Rs63 billion, further shrinking allocations across key sectors.
According to official sources, the cuts have affected multiple areas including water resources, education, health, railways, housing, and information technology, reflecting a broad-based reduction in development spending. The decision was taken by the Ministry of Finance as part of ongoing fiscal adjustments.
Following the latest reduction, the total size of the Public Sector Development Programme (PSDP) has been brought down to Rs837 billion. This comes after an earlier cut of Rs100 billion made in March, taking the cumulative reduction in the development budget to Rs163 billion so far.
Sources indicate that the earlier reduction was primarily aimed at financing subsidies on petroleum products, highlighting the government’s shifting fiscal priorities amid economic pressures. Initially, the PSDP for the current fiscal year had been set at Rs1 trillion.
Economic observers warn that continued cuts to development spending could slow down infrastructure projects and impact long-term growth, particularly in sectors critical to public welfare and economic expansion.
