PESHAWAR: The federal government has decided to cut the public sector development program (PSDP) by Rs 100 billion in response to the tense regional situation due to the US and Israel war on Iran.
Documents obtained on Thursday reveal extensive reductions across provincial grants, infrastructure projects, and essential service sectors. Sources indicate the government will redirect these funds to the prime minister’s austerity fund and fuel subsidies for petroleum and diesel to provide immediate public relief.
Chief Minister Announces 13% Increase in Education Budget
Major Cuts to Provinces and Special Territories
The federal authorities have slashed the development budget for provinces and special regions by Rs24.92 billion. According to the documents, Azad Jammu & Kashmir (AJK) and Gilgit-Baltistan face a combined cut of Rs8.21 billion. Furthermore, the development budget for the merged districts of Khyber Pakhtunkhwa has been reduced by Rs6.45 billion. Direct provincial development grants also saw a decrease of Rs10.17 billion.
Infrastructure and Energy Sectors Hit Hard
Large-scale infrastructure projects face the most significant financial withdrawals. The National Highway Authority (NHA) leads the list with a massive cut of Rs22.33 billion. Additionally, the water resources sector faces a reduction of Rs12.88 billion, while the power sector’s development budget has been slashed by over Rs9 billion. Parliamentarians’ development schemes also faced a significant reduction of Rs7.03 billion.
Tracking system for development projects restored to ensure monitoring
Impact on Education, Health, and Social Services
The documents further detail cuts in social and human development sectors:
- Higher Education Commission (HEC): Budget reduced by Rs4.22 billion.
- Federal Education: Slashed by Rs3.21 billion.
- Health and Interior Ministries: Each faced a reduction of approximately Rs1.4 billion.
- IT and Railways: Budgets cut by Rs2.22 billion and Rs2.24 billion, respectively.
The Ministry of Defense, Revenue Division, and Housing and Works also faced collective cuts exceeding Rs4 billion.
Funds Redirected for Public Relief
Official sources state that the government aims to utilize the slashed amount to stabilize the economy. Specifically, the authorities will adjust the funds into subsidies for petrol and diesel prices. Moreover, the money will move into the prime minister’s austerity fund. The government maintains that this fund actively provides relief to the public during the ongoing regional instability.
