Pakistan’s development budget has been significantly affected by the conditions attached to the International Monetary Fund (IMF) program, with official figures revealing a substantial shortfall in the utilization of allocated development funds.
According to a working paper presented before the Annual Plan Coordination Committee (APCC) meeting chaired by Federal Minister for Planning Ahsan Iqbal on Monday, the government had earmarked Rs1 trillion under the Public Sector Development Programme (PSDP). However, ministries, divisions, and administrative bodies utilized only Rs528 billion between July 2025 and May 25, 2026.
The document indicates that development expenditures have remained well below the allocated amount, highlighting the fiscal constraints faced by the government amid ongoing economic reforms and budgetary restrictions.
Addressing the APCC meeting, Ahsan Iqbal expressed concern over the declining availability of resources for development projects in Pakistan. He noted that public investment as a share of GDP has fallen sharply from 2.6 percent to just 0.6 percent over the years.
The minister said development projects worth approximately Rs5 trillion are currently under consideration, while completing ongoing initiatives would require nearly Rs10 trillion. He added that funding for development schemes has been shrinking steadily since fiscal year 2018.
Ahsan Iqbal also pointed out that provincial governments have witnessed growth in their development budgets, making them relatively better positioned in terms of development spending compared to the federal government.
Regarding the upcoming fiscal year, he revealed that various ministries had requested around Rs3 trillion for development projects. However, the federal development program remains limited to approximately Rs1 trillion, the same level as in 2018. As a result, the government will be compelled to prioritize and proceed with only selected projects due to limited financial resources.