The Ministry of Finance has made the release of development funds during the current fiscal year conditional on the government’s fiscal space, introducing a phased funding strategy for projects under the Public Sector Development Program (PSDP).
According to a notification issued by the ministry, PSDP funds for FY2026-27 will be released in four quarterly installments. This follows last fiscal year’s practice of restricting development funds to make more room for other high-priority projects.
The government will release 15 percent of the allocated funds in the first quarter, 20 percent in the second quarter, 25 percent in the third quarter, and the remaining 40 percent in the final quarter of the fiscal year.
The notification states that the federal government has allocated Rs. 1 trillion for development projects under the PSDP during the new fiscal year.
The Planning Division will be responsible for releasing funds only for approved projects, while allocations must remain within the limits of the approved budget.
The ministry has also made prior approval mandatory for all foreign payments related to development projects. No payments exceeding the approved limits will be allowed without the Finance Ministry’s authorization.
In addition, a separate assignment account will be opened for each development project to strengthen financial oversight and improve monitoring of fund utilization.
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