The National Highway Authority (NHA) is set to experience the most significant reduction in funding under the Public Sector Development Programme (PSDP) due to the federal government’s austerity strategy. This decision aims to mitigate the financial burden caused by maintaining stable petroleum prices despite the surge in global oil rates, driven by escalating tensions in the Middle East, particularly the ongoing conflict involving Iran.
The government has proposed slashing Rs100 billion from the development budget to address growing fiscal challenges. Consequently, the overall PSDP allocation for the current fiscal year is expected to decrease from Rs1,000 billion to Rs900 billion. The budgetary savings generated will be reallocated to emergency relief efforts and are anticipated to help control the fiscal deficit.
Official documents highlight that the NHA’s development budget will face the largest cut of Rs22.33 billion. Other substantial reductions include Rs24.92 billion from provincial and special area development funds, Rs8.21 billion for Azad Jammu and Kashmir and Gilgit-Baltistan, Rs6.45 billion for the merged districts of Khyber Pakhtunkhwa, Rs10.17 billion in provincial development allocations, and Rs7.03 billion from parliamentarians’ development funds.
Sector-wise, the cuts encompass over Rs9 billion in the power sector, Rs12.88 billion in water resource projects, Rs3.21 billion in federal education, Rs4.22 billion in funding for the Higher Education Commission (HEC), Rs2.22 billion in information technology, Rs1.39 billion for the Ministry of Interior, Rs1.41 billion in federal health initiatives, Rs2.24 billion for railway development, more than Rs1 billion in defense development, Rs1.71 billion for the Revenue Division, and Rs1.62 billion in Housing and Works projects.
Meanwhile, the funds saved through these budget reductions will be directed toward subsidizing petrol and diesel prices. These resources will be funneled into the Prime Minister’s austerity fund, which is dedicated to providing financial relief to the public amid economic challenges.
