Govt proposes Rs1tr for PSDP

ISLAMABAD: The government has allocated Rs70 billion for the parliamentarians’ Sustainable Development Goals (SDGs) Achievement Programme in the 2025-26 budget. The total national development outlay for the budget stands at Rs4.223 trillion, covering federal, provincial, and corporate sectors.

Total federal Public Sector Development Programme (PSDP) has been envisaged at Rs1 trillion, including Rs70.338 billion for SDGs Achievement Programme for Parliamentarians in the budget against Rs50 billion last fiscal year. The SIFC’s development budget has been proposed at Rs500 million. However, the development budget for Higher Education Commission (HEC) was proposed to be reduced from Rs61.115 billion in the outgoing fiscal year to Rs39.488 billion for the next budget. Total national development outlay, including federal, four provinces and corporation, has been envisaged at Rs4.223 trillion for budget 2025-26.

Rs17 billion, including Rs12.8 billion in foreign assistance, has been proposed for governance sector initiatives under PSDP, reflecting a decrease of 39.2 percent over the previous year. The reform agenda focuses on enhancing public sector efficiency through improved public financial management, tax administration, digitisation of court processes, e-procurement and regulatory reforms.

The government launched a 5-year plan based on the 5Es framework and “URAAN Pakistan” initiative, prompting ministries and divisions to submit project proposals for the PSDP through a January 29, 2025, call circular. They requested over Rs3,271 billion for 1,588 projects, including Rs1,054 billion in rupee cover and Rs510 billion for 468 new projects, following guidelines set by the PSDP Call Circular, PFM Act 2019, and NEC decisions dated January 29, 2024.

The throw-forward of ongoing projects stands at Rs10,212 billion, requiring priority funding according to approved annual phasing in PC-Is under PSDP FY2025-26. However, the federal PSDP faces challenges due to revised PC-I for 90pc of ongoing projects with time and cost overruns, resulting from thin spread allocations, and a demand for Rs1,052 billion in rupee cover, which limits fiscal space for core and high-impact projects due to limited IBC, and leads to project revisions and time overruns.

The government is taking corrective measures for PSDP FY2025-26 to address the Rs60 billion throw-forward from defunct Pak PWD projects and increasing demands for funds. The focus is on completing high-impact projects within 3-4 years, prioritizing foreign-funded and core/high-impact projects for financing, and giving precedence to ECNEC/CDWP-approved projects over DDWP-level projects.