Govt to present budget for fiscal year 2025-26 on June 2

• Rs700 billion needed to meet donor project requirements.
• PSDP funding falls short of Rs1,600 billion target estimate.
• Govt drops 200 projects from current development program.

ISLAMABAD: The federal government is set to present the Budget 2025-26 on June 2, with Rs921 billion allocated for development projects — far short of the Rs1,600 billion minimum deemed necessary by the Ministry of Planning, The News reported on Friday.

The ministry is concerned that the allocated amount is too small for development projects. They argue that meeting the local currency (rupee) requirements for projects funded by external donors will cost around Rs700 billion. This leaves very little room for other essential projects, making the current allocation insufficient.

The government is set to unveil the upcoming budget for 2025-26, in the parliament with the possibility of convening the Annual Plan Coordination Committee (APCC) and National Economic Council (NEC) in the third and fourth week of May 2025 respectively for approving the macroeconomic and development budget.

On the eve of the launch of Monthly Development Update along with Secretary Planning and Chief Economist here on Thursday, Minister for Planning Ahsan Iqbal said that the Ministry of Finance shared Indicative Budget Ceiling of Rs921billion for the next fiscal year’s PSDP against total requirements of ministries/divisions and attached departments of Rs2.9 trillion. 

“The PSDP allocation must hover around Rs1,600 billion to meet the financing requirement of ongoing and new initiatives under the Uraan Pakistan Programme,” he added.

The Priorities Committee held meetings in more than one week’s period and came up with total requirements close to Rs3 trillion. 

“Now we will take up this issue with the Ministry of Finance and other relevant forums,” said the minister. 

He said that the PSDP was revised downward from Rs1,400 billion to Rs1,100 billion for the current fiscal year, and the planning ministry has so far granted authorisation of Rs900 billion. It is expected that the utilisation of development funds will go close to Rs750 to Rs800 billion by the end of June 2025. 

The utilisation of development funds stood at over Rs448 billion in the first ten months of the current fiscal year. Iqbal also said that the government abolished 200 projects from the PSDP.

The minister said that there were irregularities in the Neelum Jhelum hydropower project as its CFO was Masters in Geography. About Dasu, he said that they hired an international consultant to ascertain reasons for cost escalations and are waiting for its findings.