Pakistan finalises trimmed uplift budget with Rs920 billion provincial contribution amid fiscal pressure and IMF-backed framework.
Image: CFI
The National Economic Council (NEC) has approved a Rs3.2 trillion national development package after provinces agreed to contribute Rs920 billion to support the federal government’s financing needs.
The decision followed a meeting chaired by Prime Minister Shehbaz Sharif, where provinces agreed to freeze their development spending at current levels, resulting in a reduced overall development outlay.
Under the plan, the federal Public Sector Development Programme (PSDP) has been set at Rs1 trillion, while provincial Annual Development Plans (ADPs) total Rs2.218 trillion.
Officials said the arrangement is temporary and linked to revenue performance by the Federal Board of Revenue (FBR). The funds from provinces will be treated as grants and used to meet budgetary pressures, including defence and water-related projects.
The government also said the agreement does not permanently alter the National Finance Commission (NFC) structure, though it effectively reduces the provincial share of the divisible pool for the upcoming fiscal year.
The NEC also approved key economic targets, including 4% GDP growth, 8.2% inflation, and a current account deficit target of 0.7% of GDP.
Officials said the focus of the new plan is to maintain macroeconomic stability while pushing reforms aimed at boosting exports, productivity, and investment.
