Due to pressure from the International Monetary Fund (IMF), the Ministry of Finance is considering a 48% reduction in the development budget for the current financial year, sources said on Tuesday.
The ministry has decided to slash the Public Sector Development Program (PSDP) to Rs350 billion from Rs728 billion for the current fiscal year to secure the IMF loan program.
The decision for a massive cut comes as the global money lender asks the government to plug its budget deficit at the agreed level. The finance ministry is expected to present the proposal to Prime Minister Shehbaz Sharif soon for getting approval.
However, sources said the ministry of planning has opposed the proposal to do away with such a large chunk of development funds and has decided to take the matter to PM Shehbaz Sharif.
The officials of the Planning Commission say that the final decision on the issue will be taken by the prime minister.
It is pertinent to mention here that in the budget of the current financial year, Rs727 billion were allocated for development projects. During the first four months, only 14 per cent of the allocated development budget has been spent.
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