Pakistan’s federal Public Sector Development Programme (PSDP) for 2025–26 has seen weak execution, with only Rs91.9 billion spent by November against a Rs1 trillion allocation, accounting for just 9.2 per cent of the annual outlay and 26.3 per cent of the Rs348.97 billion released during the first five months of the fiscal year, according to official documents.
Despite priority treatment, major infrastructure sectors showed weak absorption. State-owned corporations, including the National Highway Authority (NHA), National Transmission and Despatch Company (NTDC) and Pakistan Electric Power Company (PEPCO), were allocated Rs317.74 billion and received Rs111.21 billion in releases, but spent only Rs23.49 billion by November.
The NHA, a flagship infrastructure agency, was allocated Rs226.98 billion for FY26. Against releases of Rs79.44 billion, it spent Rs20.74 billion, amounting to 9.1 per cent of its annual allocation.
A similar trend was observed in the power sector. NTDC and PEPCO were jointly allocated Rs90.76 billion, with Rs31.76 billion authorised by November. Actual expenditure, however, stood at Rs2.76 billion, or 3.04 per cent of the allocation and 8.7 per cent of released funds.
Federal ministries were allocated Rs682.3 billion for FY26 and received Rs237.77 billion in releases during the first five months. Their combined expenditure, however, was limited to Rs68.41 billion, reflecting chronic implementation delays.
Sector-wise data shows that the Water Resources Division spent Rs14.91 billion out of Rs45.11 billion released from an annual allocation of Rs128.9 billion. The Defence Division utilised Rs1.16 billion against Rs4.17 billion released and a total allocation of Rs11.91 billion.
The Railways Division spent Rs5.18 billion against releases of Rs7.84 billion from an allocation of Rs22.4 billion, while the Planning, Development and Special Initiatives Division utilised Rs5.36 billion out of Rs8.14 billion released from its Rs23.27 billion allocation.
Spending in social sectors also remained subdued. Higher education used Rs7.9 billion against Rs15.74 billion released from an allocation of Rs41.65 billion. Federal education and professional training showed comparatively better absorption, spending Rs5.9 billion out of Rs6.5 billion released from a Rs18.58 billion allocation.
Utilisation was weakest in health and science. The National Health Services Division spent Rs177 million against Rs5.02 billion released, despite an allocation of Rs14.35 billion, while science and technology used Rs384 million out of Rs1.68 billion released from a Rs4.8 billion allocation.
Economists caution that the widening gap between releases and utilisation increases the risk of year-end spending pressures, cost overruns and weaker fiscal discipline, particularly as Pakistan remains under IMF oversight.
