ISLAMABAD: Federal Minister for Planning, Development and Special Initiatives Ahsan Iqbal on Monday revealed that the Ministry of Finance has allocated Rs1.126 trillion for the Public Sector Development Programme (PSDP) in the fiscal year 2026-27, a figure significantly lower than the country’s overall development funding requirements.
Speaking at the Annual Plan Coordination Committee (APCC) meeting ahead of the federal budget, Ahsan Iqbal said the limited allocation presents a major challenge for Pakistan’s development agenda. He stressed that the government would be forced to prioritize ongoing projects due to severe fiscal constraints and a growing burden of incomplete schemes.
The minister noted that the federal development portfolio currently carries a throw-forward liability of nearly Rs10 trillion. Ministries have requested around Rs4 trillion for ongoing projects alone, while the total demand for development funding has reached Rs4.097 trillion.
According to officials, ministries are implementing projects worth Rs3.377 trillion and have submitted approximately 720 new schemes. In addition, more than 5,500 project proposals have been presented for consideration under the PSDP 2026-27 framework.
Ahsan Iqbal stated that with only Rs1.126 trillion available against demands exceeding Rs4 trillion, the government has no option but to adopt a selective approach. He acknowledged that several important projects may not receive funding despite their significance for national development.
Among the key allocations, Rs125 billion has been earmarked for the N-25 Highway project in Balochistan, which Prime Minister Shehbaz Sharif has declared a top national priority. Another Rs87 billion has been reserved for projects proposed by coalition partners, while nearly Rs100 billion has been allocated for development initiatives across Balochistan.
The PSDP also includes Rs153 billion for Azad Jammu and Kashmir (AJK), Gilgit-Baltistan (GB), and the merged districts. Additionally, around Rs70 billion has been allocated for Sustainable Development Goals (SDGs)-related projects.
The minister explained that substantial resources are also needed for rupee-cover obligations linked to foreign-funded projects supported by the Asian Development Bank (ADB) and the World Bank. He said that after meeting these commitments and accounting for a Rs180 billion PSDP cut carried forward from the previous fiscal year, virtually no fiscal space remains for new development projects in the upcoming budget.
