ISLAMABAD: The utilisation of federal development funds suddenly jumped to 21 per cent in the first six months of the current fiscal year, up from 9pc a month earlier, according to Ministry of Planning and Development.

“During July-December 2025-26, ministries and divisions sanctioned Rs314.5bn under the Public Sector Development Programme (PSDP), against which reported expenditure stood at Rs210bn,” the ministry said in its Monthly Development Outlook (MDU) for January 2026.

A month earlier, the planning ministry had conceded modest spending in the first five months. “Development spending remained modest, with Rs92bn utilised against Rs196bn sanctioned, led mainly by infrastructure,” it had reported in its Monthly Development Outlook for December 2025. Even this was aided by better utilisation in foreign-funded projects. “Foreign-funded projects also advanced, with Rs12.8bn spent out of Rs25.1bn sanctioned,” the ministry had said last month.

As a result, the utilisation of development funds at Rs210bn (out of Rs1 trillion annual allocation) in 1HFY26 surged by almost 42pc compared to Rs148bn in the corresponding period last fiscal year against Rs1.1tr budget allocation.

Planning Minister Ahsan Iqbal said development spending had a historic trend of a slower pace in the initial months of the fiscal year owing to limits set by the Ministry of Finance that required authorisation of only 35pc allocated funds in the first half, but then picked up as the projects catch pace and quota for funding disbursements increase, enabling 65pc in second half of fiscal year. He also attributed the better utilisation to the close monitoring of high-impact projects.

The report showed the infrastructure sector received an allocation of Rs614.7bn (61pc) for 2025-26, of which Rs117bn had been utilised till Dec 31, 2025. Within the infrastructure, the transport and communication sector received the highest allocation of Rs325.6bn and posted an expenditure of Rs63.1bn.

The energy, physical planning, and housing sectors recorded expenditures of Rs4.3bn and Rs19.4bn, against allocations of Rs122.7bn and Rs68.6bn, respectively. The water sector with an allocation of Rs97.8bn reported an expenditure of Rs30.2bn. The social sector was allocated Rs178.6bn (18pc), wherein, Rs65.3bn was allocated for the education sector, including Higher Education, which spent an amount of Rs16bn. The health and nutrition sector utilised Rs3.6bn against the allocation of Rs16.5bn.

Published in Dawn, January 13th, 2026