The federal government has decided to focus only on high-priority development projects in the upcoming fiscal year due to limited funds. Planning Minister Ahsan Iqbal said on Monday that the total Public Sector Development Programme (PSDP) now stands at Rs880 billion, excluding Rs120bn for the N-25 expressway upgrade in Balochistan. The rest of the development budget will be spent carefully, aiming for maximum impact.
Iqbal explained that rising debt repayments and IMF conditions have reduced available resources. Inflation and high-interest rates have forced the government to adopt strict spending controls. More than half of federal spending now goes toward paying old loans. He blamed the previous government (2018–2022) for excessive borrowing, which led to the current crisis.
To manage with limited funds, the government will invest in strategic sectors like energy, water, roads, and higher education. Ahsan Iqbal said that projects close to completion or backed by foreign loans will be prioritized. He also highlighted Rs63bn for AJK and Gilgit-Baltistan, Rs70bn for merged tribal areas, and Rs53bn for science and IT. The government aims to complete ongoing projects rather than start new ones.
Furthermore, the minister stressed the urgent need to increase tax revenue. Pakistan’s tax-to-GDP ratio remains one of the lowest in the world, under 10%. Iqbal called tax evasion a national security threat and urged every citizen to act as a “watchman” against tax cheats. He warned that without serious tax reforms, Pakistan’s development future remains uncertain.
Lastly, Iqbal announced plans to cut or freeze 118 low-priority projects worth Rs1,000 billion. He said the government must stop “token allocations” and instead invest in projects that truly matter. Education, especially higher education, must grow to improve youth opportunities. He emphasized that the Diamer-Bhasha Dam, motorways, and Karakoram Highway are essential for the country’s future growth and must be completed quickly.