Prime Minister Shehbaz Sharif has rejected the initial Rs1.126 trillion Public Sector Development Programme (PSDP) draft, ordering officials to boost the allocation by Rs200 billion. The move forces planners back to the drawing board to accommodate a total outlay of Rs1.326 trillion for the upcoming fiscal year.
The Prime Minister’s directive comes as his administration struggles to balance aggressive infrastructure spending with the stringent fiscal targets required by the International Monetary Fund. By pushing for a larger development footprint, Sharif is signaling a push for economic activity, though the source of the additional Rs200 billion remains a point of contention for his economic team.
Planning Minister Ahsan Iqbal and senior finance officials are now tasked with reallocating funds to meet the new target. The pressure is on to prioritize projects that offer immediate economic returns rather than spreading the budget thin across stalled or non-essential schemes.
Critics point to the underlying math. With the government already under fire for a heavy tax burden in the proposed budget, finding an extra Rs200 billion without widening the fiscal deficit is a narrow path. The Finance Division had originally proposed a more conservative figure to keep the deficit in check, but the Prime Minister’s office remains focused on the political and economic necessity of public works.
The revised PSDP will likely prioritize energy sector improvements and connectivity projects under the China-Pakistan Economic Corridor (CPEC). These projects have long been the government’s primary vehicle for signaling development to the public.
Officials close to the development told reporters that the revised draft will be ready within days. Whether the extra allocation will be funded through internal re-appropriations or by cutting administrative expenses remains unclear.
For now, the government is betting that the boost in infrastructure spending will jumpstart growth, even as it faces the reality of a budget heavily constrained by debt servicing and interest payments. The final test, however, will be whether these funds materialize on the ground or vanish into the administrative black hole of project delays.
