Pakistan’s planning authorities wanted a massive budget increase for the upcoming fiscal year. The Finance Ministry just shut them down. Official sources confirm the government will drop almost 90% of new development projects in the 2026-27 budget.
The Ministry of Planning formally requested Rs. 3 trillion for development spending in the next budget. This proposal aimed to multiply development allocations by four times compared to the current fiscal year. However, the Finance Ministry outright rejected the full amount. Consequently, the government must abandon its aggressive push to accelerate public-sector and infrastructure projects.
Various ministries and divisions submitted over 300 new development proposals for the next fiscal year. These projects carried a staggering combined estimated cost of Rs. 7 trillion. Despite this massive pipeline, planning ministry sources expect only 10% of these high-priority projects to survive the cut. The government will drop the remaining 90%.
Instead of launching new initiatives, officials plan to restrict the upcoming Public Sector Development Programme (PSDP) strictly to ongoing schemes and development projects. The priority now is finishing what is already underway.
The numbers driving this decision are brutal. The federal development portfolio currently contains about 1,100 projects. These carry a combined cost of roughly Rs. 13 trillion. By the end of this fiscal year, total spending on these schemes will barely hit Rs. 4 trillion.
This leaves a catastrophic “throwforward”. The government still needs a massive Rs. 10 trillion just to complete its existing, unfinished PSDP commitments.
Meanwhile, the current fiscal year continues to drain funds. Out of the total Rs. 837 billion PSDP allocation, authorities spent over Rs. 450 billion between July and April. Now, they expect to burn through the remaining Rs. 370 billion entirely within May and June.
