Govt Considering Further Cut in PSDP to Lower Electricity Prices

The federal government is considering a proposal to cut the Public Sector Development Programme (PSDP) to provide relief to the public in electricity bills. According to sources, the government is considering cutting the development budget by Rs. 400 million to Rs. 700 billion. Other than cutting the PSDP, the government also plans to cough up another Rs. 1,100 billion. Moreover, provinces would also be asked to set aside Rs. 1,500 billion. The combined Rs. 3 trillion, i.e. Rs. 400 billion from PSDP, Rs. 1,100 billion from the federal government, and Rs. 1,500 billion from provinces would be used to settle circular debt and capacity payments. The Ministry of Finance and Ministry of Energy have been tasked by the prime minister to finalize the plan. However, it is pertinent to mention that the government has not taken the International Monetary Fund (IMF) into confidence over the proposal. Once the plan is finalized and approved by the prime minister, the government will likely approach the IMF for its approval before implementing it.