Pakistan’s federal development spending remained significantly below target during the first 11 months of fiscal year 2025-26, with only about half of the original Public Sector Development Programme (PSDP) allocation utilized despite the near-complete authorization of funds, according to Planning Commission data.
The Ministry of Planning and Development reported that PSDP utilization reached PKR 529.8 billion by May 31, representing 52.4% of the original allocation of PKR 1.01 trillion. The spending ratio was slightly lower than the 54% utilization recorded during the same period of the previous fiscal year, when development expenditures totaled PKR 596 billion against an allocation of PKR 1.1 trillion.
The government reduced the PSDP allocation by PKR 173 billion during the fiscal year, bringing the revised development budget to PKR 837 billion after diverting resources to fuel subsidies amid rising petroleum prices linked to regional geopolitical tensions. Against the revised allocation, utilization improved to approximately 63%.
Planning Commission figures showed that ministries and divisions had authorized disbursements of PKR 835.6 billion, nearly matching the revised PSDP envelope. However, actual spending lagged considerably, highlighting implementation bottlenecks and capacity constraints among executing agencies.
The parliamentarians’ development initiative, the Sustainable Development Goals Achievement Programme (SAP), emerged as one of the fastest-executed components of the PSDP. The programme utilized PKR 44 billion, or about 70% of its revised allocation of PKR 63.2 billion, within roughly four months.
In contrast, development spending in special regions, including Azad Jammu and Kashmir and Gilgit-Baltistan, reached PKR 153.9 billion, accounting for 62% of their annual allocation of PKR 249.2 billion after funding for those areas was reduced by PKR 52 billion.
Under the Finance Ministry’s budget release mechanism, PSDP spending should have reached at least PKR 878 billion, or 87% of the original allocation, by the end of May. Even against the revised PSDP allocation, expenditure should have approached PKR 730 billion, underscoring the sizeable gap between planned and actual spending.
Among federal entities, 33 ministries collectively spent PKR 391 billion, equivalent to 68% of their revised allocation of PKR 577 billion. Infrastructure spending remained weak, with the National Highway Authority utilizing PKR 85 billion, or 46% of its revised allocation of PKR 185 billion. The power sector spent PKR 53.7 billion, achieving a utilization rate of 73.5% against a revised budget of PKR 75 billion.
The higher education sector ranked among the strongest performers, utilizing nearly 80% of its revised allocation after spending PKR 28 billion out of PKR 35 billion. The Ministry of Federal Education and Professional Training also recorded a utilization rate of about 78%, spending PKR 21 billion against an allocation of PKR 27 billion.
By comparison, the health sector spent only PKR 3.9 billion out of PKR 11.6 billion, while the Information Technology Division utilized PKR 4.9 billion against an allocation of PKR 16.5 billion, reflecting utilization rates of 33% and 30%, respectively.
Planning Commission officials said that while fund authorizations remained broadly aligned with the fiscal release strategy, actual utilization was constrained by resource limitations and weak implementation capacity among executing agencies.
The PSDP portfolio includes 86 foreign-funded projects with a total estimated cost of PKR 4.2 trillion, supported by a fiscal-year allocation of PKR 229 billion for foreign-assisted development initiatives.
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