Islamabad, April 15, 2026 – The Europe Today: The federal government of Pakistan has reduced its Public Sector Development Programme (PSDP) by an additional Rs63 billion, bringing the total size of the development budget down to Rs837 billion, according to official sources.
The latest cut, implemented by the Ministry of Finance Pakistan, follows an earlier reduction of Rs100 billion in March. With the cumulative reduction now reaching Rs163 billion, the PSDP has significantly shrunk from its original allocation of Rs1 trillion for the მიმდინარე fiscal year.
Sources indicated that the previous reduction in March was primarily made to accommodate subsidies on petroleum products, reflecting the government’s efforts to manage rising energy costs and fiscal pressures.
The latest round of cuts has affected a wide range of sectors, including water resources, education, healthcare, railways, housing, information technology, and telecommunications. The across-the-board reductions are expected to slow the pace of development projects and impact infrastructure growth.
Officials noted that the decision underscores the government’s ongoing fiscal adjustments amid economic constraints, as it seeks to balance development spending with subsidy commitments and broader macroeconomic stability.
