How much of GDP has the government allocated for infrastructure development in the current fiscal year?

A. 0.4% B. Less than 0.4% C. 1% D. More than 1% The federal Public Sector Development Programme (PSDP) in Pakistan has been consistently shrinking over the past three years, indicating the country’s enduring financial and economic crisis. The government has limited infrastructure development spending to Rs353 billion, less than 0.4% of GDP, during the first 10 months of the current fiscal year, as it aims to achieve a primary budget surplus of 0.4% of GDP to meet IMF targets. This reduction in spending reflects the government’s financial constraints, leading to delays in project implementation and rehabilitation efforts for those affected by natural disasters like floods. The IMF is pressing Pakistan to further reduce expenditures to offset a revenue shortfall, jeopardizing the country’s chances of securing a longer and larger bailout. While Pakistan has shown some economic stability and improvement in fundamentals, the recovery remains fragile, and the IMF insists on continuing economic contraction until fiscal and governance reforms create sufficient fiscal space for growth. As a result, increased investment in public infrastructure development is unlikely in the near future.