Ayesha Saba

The federal government achieved savings of Rs 3.3 billion through a cost rationalisation exercise carried out during July-October FY 2025-26, aimed at eliminating non-essential components and ensuring more efficient allocation of development resources, according to the Monthly Development Update – December 2025 released by the Ministry of Planning, Development and Special Initiatives.

The report states that the Ministry undertook a detailed review of development proposals submitted by federal ministries and provincial governments. This process involved examining project components, identifying overlaps, removing unnecessary or redundant elements and aligning project structures with national development priorities. According to the document, the cost rationalisation initiative reflects a disciplined approach to public investment and a commitment to optimising development effectiveness.

Following the review, the total cost of assessed projects was reduced from Rs 1,445.6 billion to Rs 1,442.3 billion, resulting in savings of Rs 3.3 billion. The Ministry notes that these savings were generated without compromising project objectives, outcomes or service delivery targets. Instead, the adjustments focused on eliminating duplication, unnecessary cost escalations and non-priority expenditures within project frameworks.

The report highlights that the rationalisation exercise forms part of the government’s broader efforts to strengthen development governance, promote financial discipline and ensure better utilisation of public resources. By streamlining project components, the Ministry aims to enhance implementation efficiency and reduce fiscal pressures on the development budget.

According to the document, the rationalisation process also supports improved project planning by aligning resource allocation more closely with technical feasibility, implementation capacity and sectoral priorities. The Ministry notes that this approach contributes to better project outcomes, timely execution and more effective use of development funds across sectors.

The update further states that the cost rationalisation initiative complements ongoing monitoring, evaluation and review processes undertaken by the Ministry. These processes are designed to strengthen oversight, identify implementation gaps, ensure timely corrective actions and support evidence-based policymaking.

The Ministry emphasises that cost rationalisation is an ongoing element of project appraisal and will continue throughout the fiscal year to ensure that development investments remain aligned with national priorities and available fiscal space. It states that strengthening project scrutiny and tightening financial controls contribute to improved public sector management and support sustainable development planning.

According to the report, the Rs 3.3 billion savings achieved during July-October FY26 represent a concrete outcome of the government’s efforts to enhance the efficiency of development spending under the Public Sector Development Programme.

Credit: INP-WealthPk