Pakistan spends just 10.4% of development budget in four months

Pakistan's federal development spending remained sluggish during the first four months of fiscal year 2027, with only PKR 103.88 billion spent on development projects between July and October, representing 10.4% of the annual allocation, according to the Ministry of Planning, Development and Special Initiatives.

The federal Public Sector Development Programme (PSDP) has an allocation of PKR 1 trillion for FY27. Although the government authorized PKR 412.29 billion for development projects during the four-month period, actual expenditure amounted to only about a quarter of the authorized funds.

How much of the development budget has been utilized?

Federal ministries and divisions spent approximately PKR 74.65 billion against an annual allocation of PKR 682.485 billion, or 10.9%. Government corporations utilized approximately PKR 29.22 billion of their PKR 312.515 billion allocation, or 9.4%. Together, the two groups accounted for the reported development expenditure during the four-month period.

The annual PSDP also includes PKR 4 billion for project liabilities and PKR 1 billion for new initiatives under the China-Pakistan Economic Corridor (CPEC) 2.0.

For development projects in provinces and special areas, the allocation stood at PKR 233.386 billion, against which PKR 23.808 billion was spent during July-October.

The figures indicate that a substantial portion of the development budget remained unutilized despite the authorization of funds for federal projects.

Which sectors recorded low development spending?

Among major infrastructure sectors, the National Highway Authority (NHA) spent only PKR 13.30 billion against its annual allocation of PKR 224.515 billion, representing approximately 5.9% of its development budget.

The Water Resources Division utilized PKR 18.73 billion against an allocation of PKR 103.086 billion, while the power sector's National Transmission and Despatch Company (NTDC) and Pakistan Electric Power Company (PEPCO) projects recorded expenditure of PKR 15.93 billion against a PKR 88 billion allocation.

Development spending also remained low in the education sector. The Higher Education Commission (HEC) utilized approximately PKR 4.72 billion against its annual allocation of PKR 46 billion, representing approximately 10.3%.

The Federal Education and Professional Training Division spent PKR 6.88 billion against its PKR 36.312 billion allocation, equivalent to approximately 18.9%.

The Railways Division recorded expenditure of approximately PKR 4.66 billion against its annual development allocation of PKR 40.658 billion, representing approximately 11.4%.

What does the slow spending mean for development projects?

The limited utilization of development funds raises concerns about the pace of implementation of federally funded infrastructure, education, water and power projects.

Development expenditure is an important component of government investment in infrastructure and public services, with delays in spending potentially affecting project implementation and completion schedules.

The gap between authorized funds and actual expenditure also highlights the challenge of translating budget allocations into spending on development activities.

With eight months remaining in FY27, the government will need a substantial acceleration in development expenditure to utilize the full annual PSDP allocation.