By Farooq Awan

The government saved Rs7.5 billion in development project costs during the first two months of FY2026-27 by scrutinising proposed expenditures and eliminating non-essential components, as it moves to improve the efficiency of public investment amid fiscal constraints.

 Cost rationalisation during August alone generated savings of Rs6.5 billion, taking cumulative savings during July-August to Rs7.5 billion, according to the Ministry of Planning, Development and Special Initiatives' Monthly Development Update – September 2026, available with Wealth Pakistan.

 The savings resulted from a comprehensive review of development projects by the Central Development Working Party (CDWP) to identify and eliminate components considered non-essential.

 The ministry said the exercise was aimed at ensuring greater value for public investment and improving the efficiency of resource allocation.

 The cost rationalisation drive assumes added significance as the government seeks to concentrate limited development resources on projects capable of delivering greater economic and social impact.

 The National Economic Council has approved a Rs1 trillion federal Public Sector Development Programme (PSDP) for FY2026-27, including Rs255 billion as rupee cover for foreign-funded projects.

 The government has decided to prioritise fast-moving, high-impact ongoing projects amid fiscal constraints, with development resources to be focused on schemes aligned with Uraan Pakistan.

 During August, the CDWP held two meetings to consider 19 agenda items, comprising 14 projects, four position papers and one policy paper proposal.

 Seven projects worth Rs25.4 billion and two position papers were approved, while five projects costing Rs283.9 billion and one position paper were recommended to the Executive Committee of the National Economic Council (ECNEC). One policy paper, one position paper and two projects were deferred.

 The approved and recommended projects cover higher education, health, information technology, physical planning and housing, transport and communications, science and technology, and other development areas.

 The government is also introducing a new system for selecting future PSDP projects. Under the Public Investment Procedure and Parameters, ministries will be required to rank proposed projects using prescribed criteria before the Planning Commission conducts cross-sectoral comparisons for inclusion in the development portfolio.

 The framework places emphasis on economic viability, technical readiness, climate resilience, social impact, sustainability, private-sector participation and measurable results, while favouring fewer, better-prepared and higher-impact projects.

 The Rs7.5 billion saved through project scrutiny in July-August therefore forms part of a broader shift towards tighter project selection, strict cost control, and greater value for public resources.

Credit: INP-WealthPk