Islamabad : Federal Minister for Planning, Development and Special Initiatives, Ahsan Iqbal, chaired a high-level review meeting to assess the full-year performance of the Public Sector Development Programme (PSDP) 2024–2025, along with first quarter review of authorization and expenditures under PSDP 2025–2026. The session focused on the progress of development projects executed by Ministries/Division/Provinces as well as strategies to streamline and optimize limited development funds for the current fiscal year PSDP.
The meeting was attended by senior management of the Planning Commission, Federal Secretaries and senior Officials from Federal Ministries, Divisions, and Provincial Departments.
While addressing the Ministries, Minister Ahsan Iqbal expressed concern over the shrinking development space, stating, “For the first time in Pakistan’s history, PSDP utilization crossed Rs. 1 trillion last year, a record achievement. Unfortunately, this year, we are moving in reverse.” He noted that the PSDP has shrunk from 2.6% of GDP in 2018 to just 0.8% in 2025, placing immense pressure on the country’s ability to sustain growth and employment. “The development budget is the backbone of national progress. In view of IMF programe there are restrictions due to which development budget has been curtained. Therefore, every rupee must be spent on high priority projects, he added.
The Minister informed that a special committee was constituted by PM upon the request of the Planning Ministry. The committee conducted four-day intensive review of all ongoing projects. The committee recommended Rs. 1267 billion for PSDP 2025-2026, however, only Rs. 1000 billion was earmarked by Finance Division. He stressed the need for every ministry to thoroughly reassess their portfolios and bring forward only essential and high-impact projects. He also noted that delays in project revision often result in cost escalations, as seen in the past when 36 projects were revised last year, doubling their cost, and 26 projects were revised this year under similar circumstances. The impact of cost revision/escalation was over Rs. 1.1 trillion.
It was briefed in the review meeting that the PSDP 2024–2025 started with total throw-forward Rs. 10,216 billion. The sponsoring agencies demanded of Rs. 2,904 billion for their ongoing new projects. The original allocation of Rs. 1,400 billion was revised downward to Rs. 1,100 billion. The actual utilization against the allocation fund was Rs. 1,077 billion (98%). The Ministry presented a performance review of ongoing projects, highlighting the need for improved fund utilization amid fiscal tightening. Moreover, portfolio review of PSDP 2024-25 was conducted after mid-year review and 221 projects were planned to be completed while 123 to be capped by June 2025. Resulting a significant reduction of Rs. 2 trillion in the overall throw-forward have been made to focus on fast moving and important projects of national significance.
During formulation of PSDP 2025-2026 priority has been given to ECNEC and CDWP-approved projects, with no new provincial projects except those located in the least developed districts. Notably, 62% of allocations are directed toward ECNEC/CDWP projects and 98% toward ongoing projects initiatives. Furthermore, a No Objection Certificate (NOC) will be required for the initiation of all new projects keeping in view the resource constraints.
“The debt burden is rising, and the fiscal space is tightening. We must be responsible in our development planning,” he concluded, expressing hope that the next fiscal year would allow for a more robust and forward-looking PSDP.
Sohail Majeed is a Special Correspondent at The Diplomatic Insight. He has twelve plus years of experience in journalism & reporting. He covers International Affairs, Diplomacy, UN, Sports, Climate Change, Economy, Technology, and Health.
