Govt begins ‘rationalising’ PSDP projects

ISLAMABAD: On the instructions of the International Monetary Fund (IMF), the government has formally started rationalising the Public Sector Development Programme (PSDP) and established matrix-based principles for identifying and financing future development projects. On Thursday, Planning Minister Ahsan Iqbal chaired a meeting of a special committee formed by the prime minister. The meeting conveyed the government’s policy direction that “all projects should demonstrate robust economic and financial rationale, given the current balance of payments challenges” and the need for “a mechanism to reduce financial burdens and ensure practical implementation”. As part of the $7 billion Extended Fund Facility (EFF) approved last month, the IMF has set a structural benchmark for January 2025, requiring the government to develop and publish “criteria for project selection, including an annual limit on the total size of new projects entering the PSDP portfolio”.