ECC orders ministries to surrender Rs100bn PSDP cut for PM’s fund
- Allocation to be managed through rationalisation and surrender of PSDP funds by various ministries and divisions
ISLAMABAD: The Economic Coordination Committee (ECC) of the Cabinet has directed ministries and divisions to surrender Rs 100 billion from their Public Sector Development Programme (PSDP) allocations for 2025–26 as Technical Supplementary Grants (TSGs) to be transferred to the Prime Minister’s Austerity Fund, well-informed sources told Business Recorder.
On March 26, 2026, the Finance Division briefed the ECC that in a meeting chaired by Prime Minister Shehbaz Sharif on March 19, 2026, the impact of the Gulf region conflict on petroleum prices was discussed. The Prime Minister directed that Rs 100 billion from PSDP funds be utilised to settle price differential claims on petrol and diesel.
Subsequently, on March 24, 2026, the Finance Division requested the Planning, Development and Special Initiatives Division to restrict PSDP authorisations to Rs 900 billion for the current financial year.
READ MORE: ECC approves Rs100bn TSG for PM’s Austerity Fund 2026
The ECC was informed that in compliance with the Prime Minister’s directives, ministries and divisions had been asked to surrender development funds amounting to Rs 100 billion in favour of the Finance Division.
The Finance Division sought approval for allocation of the surrendered PSDP funds to its Demand No. 47 through a Technical Supplementary Grant, followed by their transfer to the Prime Minister’s Austerity Fund 2026 to settle price differential claims on petroleum products.
During the discussion, the ECC was informed, in response to a query, that the surrendered funds would be transferred to the Prime Minister’s Austerity Fund-2026. The Committee unanimously approved the proposal.
The ECC noted that the allocation would be managed through rationalisation and surrender of PSDP funds by various ministries and divisions, coordinated by the Planning, Development and Special Initiatives Division in consultation with principal accounting officers.
It was emphasised that the reallocation exercise aims to minimise disruption to priority and well-performing projects while creating the required fiscal space. The Committee was also informed that initial surrenders had already been received, while remaining adjustments were being finalised to meet the overall requirement.
Copyright Business Recorder, 2026
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