Amid rising Middle East tensions, the government has reduced the development budget by Rs173 billion.

Published On 15 Apr, 2026
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According to officials from the Ministry of Planning, the Public Sector Development Programme (PSDP) has been reduced from over Rs1 trillion to Rs837 billion. The cuts were implemented in two phases—Rs100 billion in the first phase, followed by an additional Rs73 billion in the second.

Authorities stated that the reduction in development spending was necessary to meet IMF requirements, while the ongoing instability in the Middle East has further strained the country’s fiscal position.

The largest cut has been made in road infrastructure, with funding reduced by Rs38 billion. Water sector projects have seen a decrease of Rs23 billion, while provincial development schemes have been cut by Rs22.5 billion.

Despite the significant reductions, most development schemes proposed by the Ministry of Planning and members of parliament have been retained.

Earlier, more than Rs1 trillion had been approved for the development budget for the current fiscal year. However, only 41 percent of the allocated funds could be utilized during the first nine months.