PM reviews Rs1.51tr development programme, prioritises funding for better-performing ministries

ISLAMABAD: Prime Minister Shehbaz Sharif on Monday reviewed the proposed Rs1.51 trillion Public Sector Development Programme (PSDP) for fiscal year 2026-27, with a focus on ensuring full utilisation of development allocations and directing greater resources toward ministries and divisions showing stronger performance.

According to an official from the Planning Division, the session was an initial review of the PSDP ahead of the upcoming federal budget, and additional meetings will be held on the matter. The programme is to be finalised at a forthcoming meeting on the Annual Development Programme (ADP).

An official of the Planning Division said the prime minister instructed that ministries and divisions delivering better results should receive increased allocations, while funding for departments lagging behind should be reduced. An official press release also said the premier stressed that public funds should be channelled into development schemes that produce concrete outcomes.

Focus on performance and priority sectors

During the meeting, the prime minister examined the current fiscal year’s development budget as well as proposed projects for the next PSDP. According to the official press release, he said ministries demonstrating stronger performance would be given preference in the distribution of development funds.

The press release said water reservoirs and hydropower schemes were among the government’s main priorities for development spending. Projects intended to expand water storage capacity would receive high priority.

The meeting was also told about progress under the current PSDP, while officials briefed participants on proposed development schemes and the funding required for the next fiscal year. Updates were presented on major national water storage and hydropower projects, including Dasu Dam, Diamer-Bhasha Dam and Mohmand Dam.

Ministries praised, partnerships encouraged

During the briefing, Prime Minister Shehbaz praised the performance of the ministries of railways, information technology and power. He also directed the relevant authorities to promote public-private partnerships in development projects.

The meeting was attended by Deputy Prime Minister and Foreign Minister Ishaq Dar, federal ministers Ahsan Iqbal, Ahad Khan Cheema and Muhammad Aurangzeb, along with senior officials.

The prime minister also commended Finance Minister Muhammad Aurangzeb over the launch of Panda Bonds and their reception in the market, according to the official press release.

Budget context

The review comes ahead of the federal budget process for 2026-27, with the government assessing both ongoing and proposed development spending. Last year, the government limited financing for new PSDP projects to two per cent for the year in line with conditions attached to the International Monetary Fund’s ongoing Extended Fund Facility (EFF).

The latest review indicates that the government is linking future development allocations more closely to implementation performance, while placing particular emphasis on water storage and hydropower projects in the next fiscal year’s development framework.