Federal uplift spending lags at 52% as Rs529bn is utilised in 11 months despite near-full authorisation

Federal ministries and agencies utilised Rs529.8 billion under the Public Sector Development Programme (PSDP) during the first 11 months of 2025-26, spending only 52.4% of the original Rs1.01 trillion development budget, according to the Ministry of Planning and Development.

The utilisation rate was lower than the 54% recorded during the corresponding period of the previous fiscal year, when Rs596 billion was spent against an allocation of Rs1.1 trillion.

The government reduced the development programme by Rs173 billion, or around 17%, to Rs837.16 billion after higher petroleum prices prompted it to provide fuel subsidies following the US-Israel attack on Iran.

Against the reduced development envelope, utilisation improved to around 63%.

By May 31, the Planning Commission had authorised Rs835.6 billion, nearly the entire revised allocation of Rs837.16 billion. However, actual expenditure remained Rs305.8 billion below the authorised amount because of resource constraints and weak implementation capacity among executing agencies.

Under the Finance Ministry’s release mechanism, the government was required to release 15% of development allocations in the first quarter, 20% in the second, 25% in the third, and the remaining 40% during the final quarter.

Based on that schedule, expenditure should have reached at least Rs878 billion, or 87% of the original allocation, by the end of May. Even against the reduced Rs837 billion envelope, spending should have crossed Rs730 billion.

The release framework was designed to allow the government to reduce development expenditure in case of revenue shortfalls while remaining within fiscal targets agreed with the International Monetary Fund.

Spending on parliamentarians’ development schemes performed better than several other categories. Disbursements under the Sustainable Development Goals Achievement Programme began after the first five months of the fiscal year.

Around Rs44 billion, or 70% of the programme’s revised Rs63.236 billion allocation, was spent within about four months. The Planning Commission had authorised nearly the entire revised allocation by the end of May.

Development expenditure in Azad Kashmir and Gilgit-Baltistan, meanwhile, stood at Rs153.86 billion, equivalent to 62% of their combined annual allocation of Rs249.2 billion.

Funding for the special regions had already been reduced by Rs52 billion to help finance fuel subsidies.

All 33 federal ministries collectively spent Rs391 billion during the 11-month period, accounting for 68% of their revised allocation of Rs577 billion.

The National Highway Authority and the power sector together utilised Rs138.7 billion, or 53.5% of their combined revised allocation of Rs260 billion.

The power sector spent Rs53.7 billion against its Rs75 billion allocation, representing a utilisation rate of 73.5%.

The National Highway Authority utilised Rs85 billion, or 46% of its revised Rs185 billion budget.

Water-sector expenditure reached Rs69.9 billion, equivalent to 65% of the revised allocation of Rs106.6 billion.

Pakistan Railways and the Planning Commission each spent Rs15 billion against separate allocations of Rs20 billion, resulting in utilisation rates of 75%.

Higher education was among the better-performing sectors, spending Rs28 billion against a revised allocation of Rs35 billion, or almost 80%.

The Ministry of Federal Education and Professional Training utilised Rs21 billion against its Rs27 billion allocation, representing around 78%.

In contrast, National Health Services spent Rs3.9 billion against an allocation of Rs11.635 billion, recording a utilisation rate of 33%.

The Information Technology Division utilised Rs4.9 billion, or 30%, of its annual allocation of Rs16.5 billion.

The development portfolio also included 86 foreign-funded projects with an estimated total cost of Rs4.2 trillion.

Of these, 25 projects were financed entirely through foreign funding, while 61 required local counterpart financing. The government provided a rupee cover of Rs229 billion for these projects during 2025-26.