PSDP Utilization Under Fire in Parliament

Nadeem Tanoli

Islamabad: Planning Minister Ahsan Iqbal Chaudhry on Friday defended the government’s development spending amid pointed parliamentary criticism over stalled projects, inter-ministerial lapses, and Pakistan’s deepening youth unemployment and migration crisis.

Responding to claims that Rs 50 billion from the Public Sector Development Programme (PSDP) 2024–25 had been diverted to the Power Division to ease circular debt, the Minister issued a categorical denial.

“No such reallocation has been made by the Planning Commission,” he told the House, countering widespread speculation over internal budget adjustments as the power sector faces mounting fiscal strain.

Iqbal also pushed back against accusations that key ministries — Commerce, Communications, and Religious Affairs — had failed to use their development allocations. 

He reported that PSDP utilization reached 98 percent, with Rs 1.076 trillion spent against a revised allocation of Rs 1.096 trillion. Low ministry-level utilization, he said, stemmed from “changes in executing agencies and the transfer of projects to provinces,” though lawmakers questioned whether the explanation masked deeper planning inefficiencies.

Read More: https://thepenpk.com/parliament-slams-cuts-to-higher-education/

Lawmakers also raised concerns over the absence of the Solarization of Tube Wells project in Balochistan from the current PSDP. The Minister clarified that the project had originally been placed under the Ministry of National Food Security with Rs 14 billion but was later surrendered to the Power Division in the previous fiscal year — an inter-ministerial shift that triggered fresh scrutiny over coordination and transparency.

Addressing calls for reform in the PSDP release process, Iqbal said the Planning Ministry issues one-line releases under the Finance Division’s quarterly Release Strategy.

He reminded legislators that third-party audits fall under the Auditor General of Pakistan’s constitutional mandate, while the Planning Commission’s primary functions are project approval and monitoring.

Performance-based budgeting, he noted, is already required under the Public Financial Management Act 2019, and the PSDP 2024–25 review concluded in September.

The session also spotlighted Pakistan’s worsening labor market and the accelerating outflow of skilled youth. Acknowledging the gravity of the crisis, the Minister said the government has rolled out an “integrated employment strategy” focused on labor-intensive sectors and introduced the National Youth Employment Policy (NYEP) 2025 under the Prime Minister’s Youth Program.

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The policy aims to diversify employment opportunities and strengthen skills development through flagship initiatives, including the Prime Minister’s Youth Skill Development Programme (PMYSDP), Youth Business and Agriculture Loans, the Ba Ikhtiyar Naujawan Internship Program, and the Prime Minister Laptop Scheme. The broader 5Es framework — Exports, E-Pakistan, Environment, Energy and Equity — is intended to support economic revival, he said.

Separately, the Ministry of Overseas Employment informed Parliament that Pakistan is negotiating new labor agreements with Iran, Iraq, Italy, and Belarus to expand legal migration channels. Lawmakers, however, cautioned that the ongoing flight of educated and skilled young citizens signals deep structural weaknesses in the economy and inadequate domestic job creation.