Cut in development budget likely

ISLAMABAD: The finance ministry has said in a report that about 50 per cent of the federal development budget will have to be cut due to the financial constraints arising out of the poor law and order situation in the country and cost of the ongoing war against terrorism.
 
The report said the economy was facing serious budgetary constraints and the Rs435-billion Public Sector Development Programme might be cut by Rs200 million.

The report has been forwarded, among others, to the Planning Commission.

Sources said that during recent negotiations in Dubai the International Monetary fund (IMF) had advised Pakistan to make a 25 per cent reduction in the development budget.

According to the ministry, increased spending on electricity subsidy and salary of the armed forces personnel had given rise to the budgetary constraints.