ISLAMABAD: Pakistan’s development spending has hit a worrying low, with the federal government utilising only Rs76 billion during the first four months of the ongoing fiscal year 2025-26 — a mere 7.6 percent of the total Rs1 trillion Public Sector Development Programme (PSDP) budget.
According to official data released by the Ministry of Planning and Development, federal ministries and divisions collectively spent around Rs54 billion — just 8 percent of their Rs682 billion allocation. Meanwhile, corporatised bodies, including major state-owned entities such as the National Highway Authority (NHA) and power sector organisations, managed to utilise only Rs22 billion, around 6.9 percent of their allotted Rs318 billion.
The figures paint a stark picture of fiscal restraint, with the Power Division emerging as one of the slowest performers, having spent only Rs1.9 billion out of its Rs91 billion allocation — a dismal 2 percent utilisation rate.
The Planning Commission had authorised Rs330 billion worth of releases by the end of October, equivalent to one-third of the total annual PSDP outlay. However, despite these authorisations, the actual disbursement and utilisation of funds remained drastically low — raising serious questions about project execution capacity, bureaucratic red tape, and the government’s spending priorities.
Officials attribute the slowdown to the government’s strict adherence to IMF-mandated fiscal discipline, designed to contain the budget deficit amid declining revenues. Under the IMF programme, Islamabad has been limiting development spending to maintain macroeconomic stability and manage debt obligations — but experts warn this approach may choke growth and stall infrastructure development.
Economists fear that such chronic under-utilisation of PSDP funds could hamper job creation, delay key national projects, and weaken investor confidence. As Pakistan struggles to balance austerity with development, the low spending trajectory highlights the growing tension between financial prudence and economic progress.
This story has been reported by PakTribune. All rights reserved.