Facing a limited development budget 2025 of Rs880 billion, Planning Minister Ahsan Iqbal announced that the government will focus only on high-value, strategic projects in the next fiscal year. This shift aligns with IMF’s fiscal discipline demands and aims to ensure value for money in public spending.
Tight Resources, Tough Choices
At the Annual Plan Coordination Committee meeting in Islamabad, Iqbal highlighted that the development budget had shrunk due to past borrowing and high inflation. Loan repayments now consume 55% of spending, leaving limited fiscal space for new initiatives.
Budget Breakdown and Priorities
Of the Rs1 trillion overall Public Sector Development Programme (PSDP), Rs120 billion has been set aside to upgrade Balochistan’s N-25 Highway into an expressway. The remaining Rs880 billion will fund infrastructure projects, especially in energy, water, and transport.
Special areas like Gilgit-Baltistan, AJK, and merged districts of KP will receive Rs63bn and Rs70bn respectively. Science and IT projects will get Rs53bn, and Rs9bn is reserved for institutional reforms.
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Shifting Focus to Completion and Strategic Value
The minister stressed that projects near completion (70–80%) will receive major funding to avoid delays and added costs.
Reforming the PSDP Approach
To ease federal strain, development responsibilities will shift to provincial governments. Iqbal noted that from 12% in 2013, provincial projects now make up 40% of PSDP—a trend the Centre plans to reverse.
Driving Growth and Exports
The government forecasts 4.2% GDP growth, led by agriculture (4.5%), industry (4.3%), and services (4%). However Export targets are set at $35 billion, with remittances expected to rise from $27bn to $37bn. Iqbal praised overseas Pakistanis for their continued support.
Calls for Tax Reform
Iqbal called Pakistan’s 10% tax-to-GDP ratio “unsustainable” and urged the nation to treat tax reform as a top security priority. To reduce reliance on loans, revenue collection must expand drastically.
He also flagged 118 low-priority projects worth Rs1,000bn for possible freezing or closure to save critical resources.
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