With the upcoming fiscal year’s budget drawing closer, most conversations in the business and policy circles are focused on the usual items, with defence spending and the International Monetary Fund conditionalities taking the limelight. What remains missing from the discourse, as usual, is the potential neglect for the development spending, which media reports suggest may be cut once again.

In FY25, the government had proudly proposed an outlay of Rs1.4 trillion under the federal Public Sector Development Programme (PSDP). However, the optimism was short-lived, as within two weeks, the allocation was slashed by Rs250 billion. Though disappointing, the move was predictable, as the PSDP has been revised downward every year throughout the past decade, with an average cut of 17.3 per cent. In contrast, overall expenditure has mostly been adjusted upwards.

Time and again, development has emerged as the frontline item to be trimmed when fiscal pressures mount. It’s come to a point where the revised FY24 allocation of Rs659bn was lower than where it stood in FY16. As a percentage of the federal budget, the PSDP has slipped below 5pc — a concerning situation for any emerging economy.

These are nominal figures, so one can imagine what the real value loss would be. In dollar terms, PSDP for FY24 had plummeted to $2.3bn, less than half its value a decade ago. It’s true that after the 18th Amendment, the responsibility no longer lies with the centre, and provinces have to play an ever-greater role in financing public sector development, especially in devolved subjects........

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