Pakistan’s PSDP disbursements lag as planning for FY26 gains momentum

Pakistan has disbursed only 50.1% of the total funds allocated to federal ministries under the Public Sector Development Program (PSDP) in the first 10 months of the ongoing fiscal year, according to data from the Planning Commission.

For fiscal year 2024-25, the government earmarked PKR 1.096 trillion for federal ministries under the PSDP. However, only PKR 894.08 billion was authorized, with actual spending reaching just PKR 448.6 billion.

The Ministry of Planning, Development, and Special Initiatives has initiated the formulation process for the PSDP 2025-26, alongside projections for 2026-27 and 2027-28. Ministries, divisions, and agencies have been directed to review and refine their development portfolios, emphasizing high-priority projects aligned with the government’s economic strategy under "Uraan Pakistan".

Officials stressed the need for a rigorous evaluation of ongoing projects to ensure their alignment with national development goals. The ministry noted that the current throw-forward stands at PKR 10 trillion—10 times the current PSDP allocation—assuming no new projects are added.

The PSDP’s share as a percentage of GDP has steadily declined, dropping from 1.7% in FY14 to 0.6% in FY25, posing challenges for the completion of key national projects. In FY26, the government aims to prioritize ongoing projects with over 80% expenditure to expedite their completion. Ministries are required to allocate funds in accordance with the annual phasing outlined in the approved PC-I.