Just Rs5.3bn spent on development in July-Aug

ISLAMABAD: The Public Sector Development Programme (PSDP) has had a sluggish start this fiscal year, with only Rs5.3 billion spent in the first two months, a mere 0.5 per cent of the Rs1 trillion allocated for the year.

This slow pace of expenditure, despite the closure of hundreds of projects to focus on strategic ones, raises concerns about the timely completion of vital infrastructure and social development projects.

According to the Ministry of Planning and Development, the total PSDP expenditure for July and August 2025 amounted to Rs5.3bn. The Ministry of Finance had established a quarterly spending framework, aiming for 15pc of the total allocation to be disbursed in the first quarter. However, actual spending has significantly underperformed, with just Rs5.3bn being spent from an authorised Rs155.56bn.

Federal ministries, collectively allocated Rs683bn for the year, could only utilise Rs4.65bn (0.68pc) of their share, while the two key infrastructure bodies — the National Highway Authority (NHA) and the National Transmission & Despatch Company (NTDC) — spent a meagre Rs657 million (0.2pc) of their joint allocation of Rs317bn. Notably, the NHA did not utilise any funds in the first two months.

Spending in critical sectors has also been abysmal. The climate change division, for example, spent only Rs8.5m (0.3pc) of its Rs2.78bn allocation, and the National Food Security Ministry used less than 1.5pc (Rs18m) of its Rs4.25bn allocation. The education sector was among the few bright spots, with the Ministry of Education spending Rs1.7bn and the Higher Education Commission (HEC) using Rs1.566bn.

Only 0.5pc of Rs1tr PSDP has been utilised, raising concerns about delays in key projects

A total of 10 federal ministries, including commerce, petroleum, and religious affairs, reported zero spending for development projects. Provincial and special areas, allocated Rs253bn for development, also showed minimal progress, with only Rs40bn authorised for the first quarter.

This low utilisation is a direct result of the fiscal constraints imposed by Pakistan’s agreement with the International Monetary Fund, which mandates a reduction in new PSDP projects to just 2pc of the allocation for FY26.

The government has focused on completing ongoing projects of national importance, with 2,518 projects worth Rs344bn being closed or completed as part of this strategy. The total development portfolio, estimated at Rs9tr, would take over 14 years to complete at the current rate of implementation, raising concerns about the country’s ability to meet its long-term development goals.

The slow pace of PSDP spending could impact key projects that affect economic growth and the well-being of citizens, adding to the mounting challenges facing the economy.

Published in Brackly News, September 10th, 2025