PSDP 2025-26 Cuts Ministry Budgets, Raises Corporate Funding

The Public Sector Development Programme (PSDP) 2025-26 has been announced with a total allocation of Rs1000 billion, down from Rs1093.53 billion in the previous year. While federal ministries face sharp budget cuts, corporations such as the National Highway Authority (NHA) and Defence Division have received larger shares.

n 2024-25, the federal PSDP was authorized at Rs1093.53 billion, with expenditures reaching Rs1076.39 billion. For 2025-26, the allocation stands at Rs1000 billion, though only Rs5.31 billion was spent in July and August, reflecting the initial phase of the fiscal year.

Allocations for federal ministries dropped significantly. Ministries received Rs836.85 billion in 2024-25, compared to Rs682.79 billion in 2025-26. Key changes include:

• Water Resources Division: Reduced from Rs194.60 billion in 2024-25 to Rs133.42 billion in 2025-26.
• Higher Education Commission: Cut from Rs61.12 billion to Rs39.49 billion.
• Railways Division: Fell from Rs35 billion to Rs22.42 billion.
• Defence Division: Increased from Rs4.58 billion to Rs11.55 billion.
• Revenue Division: Dropped from Rs14.70 billion to Rs7.15 billion.

Corporations, on the other hand, received a boost in PSDP 2025-26. Their funding rose from Rs259.15 billion in 2024-25 to Rs317.21 billion in 2025-26.

• National Highway Authority (NHA): Saw its allocation surge from Rs161.26 billion to Rs226.98 billion.
• Power Division (NTDC/PEPCO): Slightly decreased from Rs97.89 billion to Rs90.23 billion, though it remains among the largest recipients.

Overall, the PSDP 2025-26 reflects the government’s shift in spending priorities, trimming ministry budgets while directing more resources toward infrastructure and defence-related corporations.