ISLAMABAD: The Economic Coordination Committee (ECC) of the Cabinet has instructed ministries and divisions to surrender Rs100 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, sources told Business Recorder.
The Finance Division informed the ECC that during a meeting chaired by Prime Minister Shehbaz Sharif on March 19, 2026, the impact of the Gulf region conflict on petroleum prices was reviewed. The prime minister directed that Rs100 billion from PSDP funds be utilised to clear price differential claims on petrol and diesel.
Following this, on March 24, 2026, the Finance Division asked the Planning, Development and Special Initiatives Division to cap PSDP authorisations at Rs900 billion for the current fiscal year.
The ECC was further told that, in line with these directives, ministries and divisions had been requested to surrender development funds amounting to Rs100 billion to the Finance Division.
Approval was sought by the Finance Division to allocate the surrendered funds under its Demand No. 47 through a Technical Supplementary Grant, with the amount subsequently transferred to the Prime Minister’s Austerity Fund 2026 to settle petroleum-related claims.
During deliberations, the committee confirmed that the surrendered funds would indeed be moved to the Prime Minister’s Austerity Fund-2026, and the proposal was unanimously approved.
The ECC noted that this reallocation would be managed through rationalisation and surrender of PSDP funds by various ministries and divisions, under the coordination of the Planning, Development and Special Initiatives Division in consultation with principal accounting officers.
It was highlighted that the objective of this exercise is to minimise disruption to priority and high-performing projects while creating necessary fiscal space. The committee was also informed that some initial fund surrenders had already been received, with the remaining adjustments underway to meet the total requirement.
