Summary The federal government plans to raise PSDP spending to Rs1.320 trillion after budget talks with PPP and IMF.
ISLAMABAD (Dunya News) - The federal government has decided to increase the size of the Public Sector Development Programme (PSDP) for the 2026-27 fiscal year, according to official sources.
Sources said the government has proposed raising the PSDP allocation from Rs1.126 trillion to Rs1.320 trillion, increasing development spending by nearly Rs200 billion in the upcoming federal budget.
Additional funds are also expected to be allocated for development projects in Sindh and initiatives related to the Sustainable Development Goals (SDGs).
The development comes after key discussions between the federal government and the Pakistan Peoples Party (PPP) on the federal budget and development expenditures. The talks were attended by PPP leaders Naveed Qamar and Sherry Rehman, while Sindh Chief Minister Murad Ali Shah joined via video link.
According to sources, Prime Minister Shehbaz Sharif had directed authorities to increase the PSDP allocation by Rs200 billion.
Sources further said that discussions with the International Monetary Fund regarding the expansion of the development programme have also been concluded, while the government has created the necessary fiscal space to accommodate the increase.
The negotiations between the government and PPP reportedly resulted in agreement on several key demands put forward by the party, with sources indicating that these commitments will be fulfilled before the federal budget is presented.
