The federal government has spent less than 40% of its revised development budget, amounting to just Rs424 billion out of the allocated Rs1.1 trillion Public Sector Development Programme (PSDP) budget for the ongoing fiscal year 2024-25.
According to a news report, this underperformance has impacted construction work and cash flows for numerous projects, including those in provincial areas and the merged districts of Khyber Pakhtunkhwa (KP).
Official documents from the Planning Commission show that only Rs424 billion, or 39% of the revised Rs1.1 trillion PSDP, has been spent from July to mid-April. The government fell short by Rs260 billion, as 60% of the budget was expected to be used by the end of the first nine months.
Planning Minister Ahsan Iqbal defended the government’s performance, pointing out that spending in the nine-month period had increased by Rs102 billion compared to the previous year, and that March’s expenditure saw an increase of Rs27 billion.
However, the overall situation remains concerning, with many projects affected by the insufficient allocation of funds.
The data also showed that the government allocated Rs276.5 billion for provincial projects, special areas, and merged districts in KP, but actual spending had reached only Rs98.5 billion, or 36% of the annual allocation.
Despite this, certain areas performed better, with Azad Jammu and Kashmir (AJK) and Gilgit-Baltistan (GB) spending Rs56.6 billion, which is 76% of the allocated amount.
The merged districts of KP, which are already underdeveloped and severely impacted by security issues, have received just Rs15.8 billion—only 23% of their allocated Rs70 billion. This lack of focus on these districts has raised concerns, particularly as they remain one of the country’s most underdeveloped areas.
Balochistan’s projects, which account for over Rs1 trillion in costs, also remain largely underfunded, with only Rs54 billion of the Rs161 billion allocated to the National Highway Authority (NHA) spent thus far.
The government’s failure to release funds has been attributed to constraints related to its commitments with the International Monetary Fund (IMF).
However, spending on small schemes linked to parliamentarians has continued without issue. Rs35 billion out of the allocated Rs50 billion has already been spent on these projects this fiscal year, making up 69% of the annual budget.
Key ministries, such as the Water Resources Ministry and the Power Division, also face funding shortfalls. Despite an annual budget of Rs170 billion, the Water Resources Ministry has spent only Rs71 billion, with a further Rs60 billion requested to cover foreign loans. Similarly, the Power Division has spent only Rs51 billion of its Rs95 billion budget, leaving important energy projects underfunded.
