ISLAMABAD: Spending under Pakistan’s Public Sector Development Programme (PSDP) is moving slowly, with the government keeping disbursements tight to meet fiscal targets set by the International Monetary Fund (IMF). In the first four months (July–October) of FY26, total PSDP expenditure reached only Rs76 billion — just 7.6pc of the Rs1 trillion annual allocation — falling well short of the Rs330 billion authorised by the Planning Commission.
Data from the Ministry of Planning and Development shows that 35 federal ministries and divisions collectively spent just Rs54 billion, or about 8pc of their Rs682 billion allocation. Corporatised entities, primarily in the power sector and the National Highway Authority (NHA), spent Rs22 billion (6.9pc of their Rs318 billion allocation), with the power sector utilising a mere Rs1.9 billion or 2pc of its budget.
Read More: Govt mulls Rs300bn cut in PSDP
Under the Finance Ministry’s disbursement mechanism, 15pc of the PSDP allocation was expected to be released in the first quarter, 20pc in the second, 25pc in the third, and 40pc in the final quarter to manage revenue shortfalls. However, despite the Planning Commission authorising Rs330 billion for the first four months, only Rs76 billion was actually spent.
Among federal ministries, only seven crossed the Rs1 billion mark. The Water Resources Division led with Rs13.56 billion (10.5pc of its Rs129 billion allocation), followed by the NHA at Rs20 billion (8.8pc of Rs227 billion) and the Higher Education Commission at Rs5.2 billion (12.4pc of Rs42 billion). Analysts warn that the slow utilisation of development funds could delay public interest projects, affect economic growth, and impact citizens’ living standards.
Read More: PSDP 2025-26: Govt releases Rs 155.56bn funds in two months
The low spending comes despite a rare 1.6pc budget surplus in the first quarter, driven by strong State Bank profits and petroleum levy collections, highlighting the government’s cautious approach to maintain fiscal discipline amid IMF oversight.