ISLAMABAD: The Ministry of Finance has shared the Indicative Budget Ceiling (IBC) for the Public Sector Development Programme (PSDP) of Rs1,126 billion for the upcoming budget for 2026-27 against the revised demand of Rs2,900 billion.
Meanwhile, the Ministry of Finance has also indicated that the development budget in the shape of PSDP for the current fiscal year 2025-26 had been further reduced and now stood at Rs820 billion against the original allocation of Rs1,000 billion. Initially, the allocation was reduced by Rs170 billion, and now an additional Rs10 billion has also been slashed, bringing it down to Rs820 billion for the outgoing financial year.
Different ministries, divisions and departments demanded that the Planning Commission allocate Rs4,000 billion for the development budget, but the Ministry of Finance expressed its inability to allocate such massive funding for development projects. The Ministry of Planning directed the concerned ministries to slash their funding demands and apprised it of the outlay required to cater for ongoing projects. Minister for Planning Ahsan Iqbal wrote a letter to Prime Minister Shehbaz Sharif, requesting an allocation of Rs2,900 billion for the PSDP in the next budget for 2026-27. “The Planning Commission has received the IBC from the Ministry of Finance and made an allocation of Rs1,126 billion for the next PSDP in the fiscal year 2026-27,” top official sources confirmed to The News on Wednesday.
When contacted by this correspondent, Minister for Planning Ahsan Iqbal confirmed to The News that the Ministry of Finance had shared its IBC amounting to Rs1,126 billion against the written demand for an allocation of Rs2,900 billion to meet the funding requirements of ongoing development projects in the next budget. Sources said the Annual Plan Coordination Committee (APCC), comprising federal ministries and provincial governments, was expected to meet on May 20, 2026, to recommend the macroeconomic framework and development outlay for the next budget.
The National Economic Council (NEC) is likely to meet under the chairmanship of Shehbaz Sharif on May 22, before his departure for China. The government has so far given a tentative date of June 1, 2026, for the announcement of the next budget, although some sources said it might be delayed by a few days and could instead be announced on June 5, 2026.
