The federal government of Pakistan is seeking to reverse funding cuts for parliamentarian schemes, despite imposing a 17 percent reduction on PSDP projects, including key water, health, and education initiatives, to finance fuel subsidies amid US-Israel-Iran tensions. Official sources revealed that the government plans to restore Rs7.026 billion for the Sustainable Development Goals Achievement Programme (SAP), commonly known as parliamentarian schemes, through a technical supplementary grant. With the Prime Minister’s approval, a summary will be submitted to the Economic Coordination Committee (ECC) for final approval.
Background of the Cuts
In March, the government implemented a Rs173 billion (17 percent) cut on the PSDP for fiscal year 2025-26, reducing it from Rs1010 billion to Rs837 billion. A 10 percent cut, amounting to Rs7 billion, was applied to parliamentarian schemes, lowering their allocation from Rs70.388 billion to Rs63.237 billion. These cuts were aimed at redirecting funds to cover fuel subsidies. However, the government now intends to reverse the 10 percent reduction on these schemes.
Impact on Key Sectors
Interestingly, while cuts to water, health, and education projects received little attention, the reduction in parliamentarian schemes has been deemed critical. The source noted that the reversal of the cut is of paramount importance. The Planning, Development and Special Initiatives (PD&SI) Division had surrendered Rs7,026.328 million from the PSDP allocation for SAP to the Finance Division to fund fuel subsidies.
Restoration Process
The Cabinet Division requested the Prime Minister to restore the withdrawn funds to prevent project disruptions, cost escalations, and ensure timely achievement of socioeconomic outcomes. The Prime Minister accepted the request and directed the planning ministry to restore the funds. A summary will now be moved to the ECC for approval of the Rs7,026.328 million restoration via a technical supplementary grant.
Additional Context
In related news, exports to the US increased by 1.70 percent to $5.12 billion over 10 months, and power consumers are expected to receive a relief of Re0.80 per unit in June bills. The country's foreign reserves stand at $22.64 billion.
