ISLAMABAD: The Public Sector Development Programme (PSDP) has flattened to just Rs148 billion in the first half of the current fiscal year against revised allocation of Rs1.1 trillion amid substantial revenue shortfalls and the government’s tight control over disbursements to meet requirements of the International Monetary Fund (IMF).

According to half-yearly (July-December 2024) data released by the Ministry of Planning and Development on Wednesday, the total PSDP spending stood at about Rs148bn, accounting for about 10.5pc of the original budgetary allocation of Rs1.4tr. During the same period, the country faced a revenue shortfall of about Rs386bn against the target.

The PSDP utilisation is even significantly lower, both in absolute and percentage terms, than in the same period of last year when a caretaker setup was running the government and fiscal control was stricter than elected governments. The data showed PSDP spending in July-December 2023 stood at Rs150bn, accounting for 16pc of Rs940bn annual allocation.

Govt spends a meagre Rs148bn on PSDP against Rs1.1tr allocation

Utilisations

All the 36 federal ministries and divisions and their agencies could spend only Rs124.5bn in six months, accounting for 14.7pc of their Rs843bn allocations. The Planning Commission, however, claimed that it had authorised Rs286.6bn for disbursement to the federal ministries in the first half of the year, accounting for almost 34pc of the annual target (Rs843bn) and in line with the finance ministry’s instructions but only Rs124.5bn could be spent on the ground.

Likewise, it said the planning ministry had authorised Rs376bn against a PSDP size of Rs1.1tr that was in line with the quarterly quota, but actual spending stood at Rs148bn.

The two major overall corporate entities — National Highway Authority (NHA) and National Transmission and Despatch Company (NTDC) — spent a meagre amount of Rs23.6bn in 1HFY25 or about 9pc against their joint allocation of Rs255bn. Even individually, the NHA utilised about Rs19.7bn against its annual share of Rs161bn.

The power sector utilised a miniscule amount of Rs3.9bn in half of the year or around 4pc of Rs95.5bn annual allocation. Likewise, despite the country being at risk of natural disasters, the Climate Change Division spent only Rs113 million in six months or about 2pc of its Rs5.256bn allocation. Another critical ministry in the social sector — National Food Security — could utilise about 2.5pc (Rs613m) against Rs23.9bn.

The Railways Division could unusually touch the general utilisation threshold spending Rs12.24bn, almost 35pc of Rs35bn allocation.

Conversely, the Planning Commission, which is the custodian of the development programme, could itself make an expenditure of just Rs1.1bn, about 5pc of a hefty allocation of Rs21.4bn it had amassed at the time of budget approval.

The provinces and special areas (merged districts of Khyber Pakhtunkhwa, Azad Kashmir and Gilgit-Baltistan) were jointly able to spend Rs46bn, around 18pc of their annual allocation of Rs257bn. Water Resources Division, which had the largest allocation in PSDP at Rs170bn, could spend only Rs32bn, or 18.8pc. The Higher Education Commission spent Rs9.6bn (15.7pc) against Rs61bn. The Cabinet Division spent Rs6.8m (0.013pc) against Rs51bn.

However, six ministries — commerce, communications, housing and works, narcotics control, religious affairs and strategic planning — could not spend a penny in 1HFY25.

Published in Dawn, January 9th, 2025