IMF asks Pakistan to drop Rs1.1 trillion provincial projects from federal budget

The International Monetary Fund (IMF) has asked Pakistan to remove provincially mandated development projects from its federal development budget, urging adherence to constitutional responsibilities defined under the 18th Amendment.

The federal government is expected to exclude 168 provincial development schemes from the upcoming budget, sources told Express Tribune.

The total cost of these projects amounts to Rs1,100 billion, of which Rs300 billion has already been spent.

The IMF has directed that no further federal funding be allocated to these projects, which are considered the responsibility of provincial governments. Completing the remaining work would require an estimated Rs800 billion, which the IMF says should now be financed through provincial development budgets.

The demand reflects the IMF’s broader push for fiscal discipline and clarity in federal-provincial expenditure responsibilities as Pakistan continues to negotiate economic reforms under its loan programme.

Pakistan’s Finance Minister Muhammad Aurangzeb departed for New York earlier this week ahead of key engagements in Washington, where he is expected to raise the issue of rescheduling guaranteed debt with his Chinese counterpart. The discussion is set to take place on the sidelines of the International Monetary Fund’s (IMF) spring meetings.

According to government sources, Aurangzeb is also scheduled to meet with the IMF Managing Director and a senior official from the U.S. Treasury Department during the visit.