The utilisation of Pakistan’s federal development funds surged to 21 per cent in the first half of the current fiscal year (FY26), up from 9 per cent in the previous month, according to the Ministry of Planning and Development.
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Between July and December 2025, ministries and divisions sanctioned Rs314.5 billion under the Public Sector Development Programme (PSDP), of which Rs210 billion was reported as spent. By contrast, in the first five months of FY26, only Rs92 billion of Rs196 billion sanctioned had been utilised, largely for infrastructure projects. Foreign-funded initiatives also advanced, with Rs12.8 billion spent out of Rs25.1 billion sanctioned, the ministry said.
The year-on-year comparison showed a 42 per cent rise in development spending during 1HFY26, with Rs210 billion utilised from a Rs1 trillion annual allocation, compared to Rs148 billion spent in the same period last fiscal year against a Rs1.1 trillion budget.
Planning Minister Ahsan Iqbal said the historically slower pace of development spending in the first half of fiscal years was due to Ministry of Finance limits, which allow only 35 per cent of allocated funds to be released initially. Spending typically accelerates in the second half when the quota rises to 65 per cent, aided by closer monitoring of high-impact projects.
The report showed infrastructure received the largest allocation of Rs614.7 billion (61 per cent of total funds), with Rs117 billion spent by December 31, 2025. Transport and communication projects led the sector with Rs63.1 billion utilised. The energy sector spent Rs4.3 billion of Rs122.7 billion allocated, housing and physical planning Rs19.4 billion of Rs68.6 billion, and water sector Rs30.2 billion of Rs97.8 billion.
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The social sector recorded Rs65.3 billion for education, including Rs16 billion spent on higher education, while health and nutrition utilised Rs3.6 billion of Rs16.5 billion allocation, reflecting the early-stage disbursement patterns common in federal development programmes.