Federal govt spends only 27% of Rs1 trillion development budget in seven months

The Ministry of Planning and Development reported that federal ministries and divisions have sanctioned Rs338.2 billion under the Public Sector Development Programme (PSDP) for fiscal year 2025-26, with Rs272.8 billion already spent on various development projects, amounting to 27% of the total Rs1 trillion allocated in the budget, which is well below the target set by the Ministry of Finance for the ongoing fiscal year.

As of January 31, however, the government had originally aimed for a 43% utilisation rate, expecting at least Rs443 billion to be spent by this point.

While the current spending shows a slight improvement from the previous year, where Rs220 billion was spent during the same period in FY25, accounting for 20% of the allocation, it still falls short of the government’s set targets.

The breakdown by sector shows that the infrastructure sector has utilised Rs156.4 billion, or 25% of its allocated Rs614.7 billion. The transport and communication sector, receiving the highest allocation at Rs325.6 billion, spent Rs80.5 billion, which is only 24.7% of its share. The energy sector used just 8.5% of its allocation, spending Rs10.69 billion out of Rs122.65 billion, while the physical planning and housing sector utilised 45% of its budget, amounting to Rs30.93 billion out of Rs68.64 billion.

The water sector, with an allocation of Rs97.8 billion, reported an expenditure of Rs34.33 billion. Meanwhile, the social sector had an allocation of Rs178.25 billion, with Rs65.3 billion directed toward the education sector, which spent Rs24.38 billion.

The health and nutrition sector has spent Rs3.66 billion of its Rs16.54 billion budget, and smaller sectors such as science and IT spent Rs8.37 billion of their allocated Rs42.74 billion.

Despite the increase in spending, experts have pointed out that PSDP funds have yet to meet the government's intended targets, and there is a need to expedite the utilisation process to avoid delays in ongoing and planned projects.