ISLAMABAD(National Times)- Barring about 70 per cent utilisation of public funds for ruling parliamentarians’ schemes, the government and its agencies struggled with the development programme, spending less than half of the budget allocations for public welfare projects under the Public Sector Development Programme (PSDP) in the first three quarters of the current fiscal year.
According to the Ministry of Planning and Development, total utilisation of PSDP funds amounted to Rs415 billion in the first nine months (July-March), accounting for 41.5pc of the Rs1 trillion budget allocation.
The utilisation was slightly better than 36.4pc in the same period last year, when PSDP expenditure amounted to Rs400bn against an allocation of Rs1.1tr.
Towards the end of March, the government slashed PSDP allocations by Rs90bn to finance fuel subsidies as petroleum prices surged following the US-Israel attacks on Iran. Even then, actual utilisation improved only marginally to 45.6pc of the revised Rs910bn PSDP size.
The government began bulk disbursements to parliamentarians’ schemes, codenamed the Sustainable Development Goals (SDGs) Achievement Programme (SAP), after the first five months of the fiscal year.
By the end of nine months, the Planning Commission had authorised nearly 90pc (Rs57.23bn) of the revised annual allocation of Rs63.24bn, of which more than Rs44bn (around 70pc) had been spent. Interestingly, these funds were authorised and spent within a short span of about four months, becoming the fastest programme in execution.
As of March 31, ministries and divisions had sanctioned Rs589bn, against which Rs414.96bn (45.6pc of the actual allocation) had been spent. The annual PSDP allocation for 2025-26 stood at Rs1tr.
In contrast to the relatively strong spending on parliamentarians’ schemes, disbursements to special regions — including Azad Kashmir and Gilgit-Baltistan — remained weak. Only Rs115.5bn was spent on development activities in these areas, accounting for 46pc of the annual allocation of Rs249.2bn, which had already been reduced by Rs25bn to accommodate fuel subsidies.
Overall utilisation remained much behind the disbursement schedule approved by the government, though slightly higher than last year. PSDP expenditure in the first nine months of the previous fiscal year had stood at Rs400bn, or 36.4pc of the Rs1.1tr allocation.
Under the release mechanism announced by the Ministry of Finance for the current fiscal year, the government was expected to release 15pc of the allocation in the first quarter, followed by 20pc in the second quarter, 25pc in the third quarter and the remaining 40pc in the final quarter to manage fiscal targets agreed with the IMF.
Under this mechanism, PSDP spending should have reached at least Rs750bn (75pc of the budget). Even under the reduced PSDP envelope of Rs910bn, utilisation should have been around Rs682bn — leaving a shortfall of nearly Rs267bn.
All 33 federal ministries together utilised only Rs301bn in the first three quarters, accounting for 48pc of the Rs627bn revised allocation. The two major infrastructure-related entities — the National Highway Authority and the power sector — together consumed only 40pc of their combined revised allocation of Rs282.6bn.
Of this, the power sector utilised Rs41.3bn against its Rs81.68bn allocation, showing about 50pc utilisation. The National Highway Authority spent Rs73bn in nine months, accounting for 36pc of its Rs201bn revised budget. The housing sector recorded particularly low spending, using just Rs1.9bn against its Rs15bn allocation, or 13pc.
Among relatively better-performing sectors, higher education spent Rs21bn out of Rs38bn, achieving around 55pc utilisation. Likewise, the federal education and professional training division used Rs16.5bn against Rs29bn, also about 55pc.
The water sector utilised Rs51bn, or 44pc, of its revised allocation of Rs116bn, despite the country’s growing water scarcity and infrastructure constraints. Both Railways and the Planning Commission spent Rs10bn each against their respective allocations of Rs20bn, reflecting 50pc utilisation.
The national health services sector utilised Rs3.6bn against an allocation of Rs12.65bn, or just 28pc, while the information technology division spent Rs4bn against an annual allocation of Rs20bn, showing only 20pc progress.
It is worth noting that the Planning Commission had authorised Rs588.7bn for the first nine months against the revised PSDP size of Rs910bn, meaning even authorisations at 64.6pc were way behind its own notified schedule of at least 75pc.
The PSDP portfolio also includes 86 foreign-funded projects with a total cost of Rs4.2tr, of which 25 are fully foreign-funded while the remaining 61 involve local counterpart funding. For FY26, a rupee cover of Rs229bn has been allocated for these projects.
The Ministry of Planning authorises one-line releases to sponsoring ministries and divisions in line with quarterly ceilings set by the Finance Division under the development budget release strategy. Principal accounting officers are empowered to release and sanction funds for both foreign aid and local components based on each project’s requirements.
