Uplift budgets slashed amid deepening fiscal crisis

Amid a worsening fiscal and economic crisis, the Ministry of Finance has imposed significant cuts on development budgets for all provincial development institutions in the 2026-27 fiscal year.

Under the new restrictions, no development authority or corporation in the six districts of Rawalpindi Division will be able to initiate a major public project between July 1, 2026 and June 30, 2027. Similar restrictions have also been imposed on departments including education, forests and health.

The government has directed that no institution will be allowed to submit development schemes merely in draft form. Any department seeking a project must first complete feasibility studies, prepare a PC-I and cost estimates, and then inform the Ministry of Finance. Only after receiving a positive response regarding the availability of funds may a project be submitted for final approval.

All development schemes submitted without completing this process have been rejected and returned. The decision has reportedly caused concern among development institutions.

An official of a Rawalpindi-based development authority said preparation of feasibility reports, PC-I documents and cost estimates requires substantial funding. He questioned how institutions would bear these costs themselves and who would be responsible if a project was ultimately rejected.

According to estimates, the budget cuts and restrictions will affect around 450 schemes, including seven major projects in Rawalpindi Division. As a result, all mega projects in Rawalpindi district have been excluded from the Annual Development Programme.