Govt May Drop 90% of New Development Projects in Next Budget

Pakistan’s planning authorities have proposed sharply higher development spending for fiscal year 2026-27, seeking as much as Rs. 3 trillion for public projects. However, the finance ministry has reportedly rejected the request, according to official sources.

The proposal, if approved, would increase development allocations by up to four times compared with the current fiscal year, reflecting the government’s attempt to accelerate infrastructure and public-sector projects.

Sources told ProPakistani that the Ministry of Planning had asked the Ministry of Finance to provide Rs. 3 trillion for development spending in the next budget, but the finance ministry declined to accommodate the full amount.

The debate comes as ministries and divisions have submitted more than 300 new development project proposals for the next fiscal year, with a combined estimated cost of up to Rs. 7 trillion, according to sources in the planning ministry.

Despite the large pipeline, only around 10% of the new projects considered high priority are expected to be included in the Public Sector Development Programme, the sources said.

Officials are also considering restricting the next PSDP largely to ongoing schemes, with a proposal under discussion to prioritize the completion of existing projects instead of adding a large number of new ones.

In the current fiscal year, more than Rs. 450 billion has already been spent on development projects between July and April. Out of the total PSDP allocation of Rs. 837 billion, nearly Rs. 370 billion is expected to be utilized in May and June.

Sources said the federal development portfolio currently includes around 1,100 projects with a combined cost of about Rs. 13 trillion. By the end of the ongoing fiscal year, total spending on these schemes is expected to reach nearly Rs. 4 trillion.

Planning Commission sources said the throwforward, or the funding required to complete ongoing PSDP projects, stands at around Rs. 10 trillion, underlining the scale of the government’s unfinished development commitments.