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• Line ministries lag far behind planned release schedule, despite Rs403bn sanctioned
• Only Rs90.6bn out of Rs249.2bn allocated for AJK, GB spent
ISLAMABAD: Hefty disbursements for the development schemes of ruling party MNAs means the utilisation of the Public Sector Development Programme (PSDP) funds has increased to 36pc in the first eight months (July-February) of the current fiscal year, up almost 8pc from a comparable period last year.
The government began bulk disbursements to parliamentarians’ schemes, known as the Sustainable Development Goals Achievement Programme (SAP), after the first five months of the fiscal year.
By the end of the eight-month period (July-February), the Planning Commission had authorised almost 82pc (Rs57.23bn) of the annual allocation of Rs70.26bn, and about Rs39.5bn (56pc of the budget) had actually been spent.
Interestingly, these funds were authorised and utilised within a short span of about four months, making it the fastest programme in execution.
“As of Feb 28, 2026, ministries and divisions have sanctioned an amount of Rs403bn, against which Rs361bn (36pc of allocation) has been reported as expenditure,” the Ministry of Planning and Development said in a statement. The annual PSDP allocation in the budget for 2025-26 amounts to Rs1tr.
Compared to relatively strong spending on parliamentarians’ schemes, disbursements to special regions including Azad Jammu and Kashmir and Gilgit-Baltistan struggled. Only Rs90.6bn was spent on development activities in these areas, accounting for 36pc of their annual allocation of Rs249.2bn.
Overall utilisation remains far behind the disbursement schedule approved by the government, though it is higher than last year. PSDP expenditure in the first eight months of the last fiscal year stood at Rs312.3bn, accounting for 28.4pc of the Rs1.1tr allocation for that year.
Under the mechanism announced by the Ministry of Finance for the current fiscal year, the government is required to release 15pc of the budgeted allocation in the first quarter, followed by 20pc in the second quarter, 25pc in the third quarter and the remaining 40pc in the last quarter of the fiscal year.
The arrangement is meant to ensure that any revenue shortfall can be managed through cuts in development spending in line with fiscal targets agreed with the IMF.
Under this mechanism, PSDP spending should have crossed at least Rs560bn (56pc) of the total allocation by February.
The infrastructure sector utilised Rs214.74bn in eight months, about 35pc of its budget allocation of Rs614.72bn. Within this sector, transport and communications received the highest allocation of Rs325.62bn but managed to spend only Rs95bn, or 29pc.
The energy sector utilised Rs40.6bn, accounting for 33pc of its Rs123bn allocation.
The water sector, with an allocation of Rs97.8bn, reported expenditure of Rs44.9bn by Feb 28, almost 46pc of the allocation.
Physical planning and housing within the infrastructure sector spent Rs34.2bn, representing the highest utilisation rate of 50pc of its Rs68.6bn allocation.
The social sector was allocated Rs178.25bn. Of this, Rs65.3bn was allocated to the education sector, including higher education, which spent Rs30.4bn, or 46pc of the allocation.
The health and nutrition sector utilised Rs3.7bn against an allocation of Rs16.54bn, accounting for just 22pc. Smaller sectors grouped under “others” utilised Rs5.1bn against an annual allocation of Rs26.4bn, showing 19pc progress.
Despite governance challenges, utilisation in the governance sector amounted to only Rs3.2bn in eight months, or 31pc of its Rs10.3bn allocation.
The science and IT sector utilised Rs10.3bn (24pc) against an allocation of Rs42.74bn, while the food and agriculture sector spent Rs1.2bn (31pc) against its Rs3.9bn allocation.
All 33 federal ministries and divisions together utilised Rs254.55bn, or 37pc of their total allocation of Rs686bn.
In contrast, two major corporations together spent Rs106.7bn in eight months against their budget allocation of Rs314bn, registering 34pc progress. Of this, the National Highway Authority (NHA) spent Rs72bn out of Rs223.4bn, about 32pc, while power division corporations consumed Rs34.7bn against their Rs90.7bn allocation, almost 38pc.
The Planning Commission had authorised Rs558bn for the first eight months in line with the financial mechanism in place. However, line ministries and their attached entities remained far behind in actual spending because of multiple bottlenecks at the execution stage.
The PSDP portfolio also includes 86 foreign-funded projects with a total cost of Rs4.2tr, of which 15 projects are fully foreign-funded, while the remaining 71 are implemented with local counterpart funding.
For FY2025-26, a rupee cover of Rs229bn has been allocated for these projects.
The Ministry of Planning authorises one-line releases to all 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.
Official records show ministries and divisions have sanctioned Rs85.7bn and recorded expenditure of Rs63.5bn against the allocated rupee cover.
Published in Dawn, March 9th, 2026
