Islamabad: The Pakistan government has slashed the development budget from Rs 280 billion to Rs 180 billion and more cuts would be made in the coming days, Finance Minister Abdul Hafeez Sheikh has said.
Unnecessary expenditure by the government too will be cut and the decision on reducing the Public Sector Development Programme (PSDP) had been taken in the larger national interest, Sheikh told businessmen at the Federation of Pakistan Chambers of Commerce and Industry in Karachi.
The PSDP could be further cut to Rs 140 billion to curtail the fiscal deficit, Sheikh said yesterday.
Pakistan is facing grave challenges like a rise in oil prices, the impact of floods on the economy and a deteriorating law and order situation, he said.
The rise in international oil prices posed a threat to the country's economy and any increase in oil prices was the last option that the government had, he added.
In a separate meeting with journalists at the State Bank of Pakistan, Sheikh said most of the government's expenditure is incurred on providing subsidies.
"Rs 256 billion alone was spent on subsidies," he said.
The government will stick to its "best national interest" stance in dialogue with the International Monetary Fund, he said.
"It is in our own interest to also fulfil our international commitments. We are continuing dialogue with IMF and they are our development partners," he said.