The federal government’s development spending surged to a record Rs1.046 trillion in the fiscal year 2024-25, which is the highest uplift spending in Pakistan’s history, according to Planning Minister Ahsan Iqbal.
The increase was attributed to a combination of more external development loans and eleventh-hour fund releases by budget controllers. This marks a rise in Public Sector Development Programme (PSDP) spending, surpassing the previous year’s figure of Rs905 billion due to delayed fund disbursements.
Iqbal highlighted that the last-minute addition of Rs141 billion between July 2 and 9, 2025, helped push total spending to Rs1.046 trillion. The minister explained that the additional funds were sourced from Rs80 billion in foreign loans, increasing the total foreign loans for the PSDP to Rs237.4 billion.Â
The minister explained that this accomplishment came despite substantial budgetary pressures. The Public Sector Development Programme (PSDP), initially set at Rs 1,400 billion, was reduced to Rs 1,100 billion due to macroeconomic constraints. Even so, over 95% of the revised allocation was efficiently utilized.
The release of these funds followed intervention from the Prime Minister’s Office after a temporary shutdown of the system by the Accountant General of Pakistan Revenue (AGPR), aimed at ensuring the IMF’s primary budget surplus target was met.
Despite the spending increase, the planning ministry had initially aimed for a full utilization of the revised Rs1.1 trillion PSDP allocation. However, delays in fund releases had caused the government to miss this target.Â
Ahsan Iqbal criticised the finance ministry’s strategy of linking 40% of PSDP spending to the last quarter of the fiscal year, which often results in artificial budget surpluses early in the year, only to be offset by large expenses in the final quarter.
Looking ahead, the finance ministry has outlined a similar strategy for the fiscal year 2025-26, with planned releases of 15% in Q1, 20% in Q2, 25% in Q3, and 40% in Q4. The planning minister indicated that his ministry would push for a more even distribution of funds across the year, stressing that the uneven distribution of funds has caused significant delays and challenges in project execution.
In addition to the development budget, significant investments were made in sectors such as energy, with projects worth Rs500 billion approved, along with infrastructure developments like the Hyderabad-Sukkur Motorway Eastbay Expressway. These initiatives are expected to generate nearly 10,000 direct jobs and over 47,000 indirect jobs. The government also allocated Rs63.6 billion for parliamentarians’ schemes, exceeding the revised budget.
While addressing the concerns raised by the International Monetary Fund (IMF) and the National Fiscal Pact, the planning minister also revealed a significant increase in spending on provincial projects, now totaling Rs82 billion. These figures are expected to be scrutinized further by fiscal authorities.
