The International Monetary Fund (IMF) has urged Pakistan to end special treatment for parliamentarians’ development schemes and integrate them into the Public Sector Development Programme (PSDP) through the regular approval process. It emphasized that these projects must be evaluated with the same scrutiny as other national projects to ensure fairness, accountability, and effective use of public funds. The IMF also stressed that mid-year budget adjustments should not take place without prior approval from Parliament, highlighting the need to strengthen legislative oversight.
To further improve transparency, the IMF recommended publishing the annual Budget Strategy Paper at least six months before presenting the national budget. This recommendation runs contrary to the current finance ministry practice of delaying such publications. The global lender argued that timely release of strategy documents would allow the government to set realistic macroeconomic and fiscal targets, while also providing Parliament with enough time for meaningful discussions before budget approval.
The IMF highlighted that Pakistan spent Rs61 billion on MPs’ schemes in the last fiscal year, while Rs70 billion has already been allocated for this year. These community-level projects, which often fall within the responsibilities of local governments, are currently approved by a steering committee chaired by Deputy Prime Minister Ishaq Dar. Unlike projects reviewed by the Central Development Working Party or the Executive Committee of the National Economic Council, MPs’ schemes undergo limited scrutiny, raising concerns about wastage and inefficiency.
Moreover, the IMF advised limiting allocations for new PSDP projects to only 10 percent of the total development budget, in order to prioritize ongoing projects. It warned that frequent political announcements of new schemes stretch resources thin and delay completion timelines, with many projects already taking more than a decade to finish. The Fund urged the Ministry of Planning to retain only high-priority projects and rationalize the PSDP portfolio by eliminating politically motivated or low-impact schemes.
The IMF also raised concerns over Pakistan’s weak public finance management and the government’s limited appetite for transparency. It criticized the Ministry of Finance for not presenting the Budget Strategy Paper to the cabinet this year, violating parliamentary requirements. The lender further recommended that Islamabad should maintain a contingency pool for emergencies such as natural disasters, rather than relying on supplementary grants issued during the year without Parliament’s prior approval.
In another key proposal, the IMF advised amending the Public Procurement Regulatory Authority law and rules to remove preferential treatment for state-owned entities and charitable organizations. It argued that this would strengthen efficiency, accountability, and transparency in public procurement. The global lender stressed that without meaningful reforms in budgeting, procurement, and project selection, Pakistan risks further weakening its fiscal position and undermining long-term development goals.