Development spending in Pakistan surged past the revised target during the last fiscal year (2025-26), with ministries and divisions utilizing Rs912.214 billion—or 111 percent—of the re-revised Rs820 billion Public Sector Development Programme (PSDP) budget. This amount is approximately Rs92 billion higher than the revised allocation of Rs820.613 billion, according to an official source who spoke to The Nation.
Expenditure Details and Year-on-Year Comparison
Despite exceeding the revised target, the utilization is Rs98 billion (18.81 percent) less than the original allocation of Rs1,010 billion for PSDP FY2025-26. On a year-on-year basis, development expenditure declined by 15.23 percent compared to Rs1,076 billion spent in fiscal year 2024-25.
The federal government had initially imposed a cut of over 17 percent (Rs173 billion) on the PSDP, reducing allocations from Rs1,010 billion to Rs837 billion to fund subsidies on petroleum products. Later, it was revealed that the cut exceeded 18 percent, slashing the PSDP to Rs820.513 billion from the original Rs1,010 billion.
Authorization and Release of Funds
The Planning Ministry issued nearly 100 percent authorization for the release of the entire re-revised allocated amount to ministries, divisions, and corporations. Against the authorization of Rs820.495 billion, the Finance Ministry released 82 percent—or Rs676.638 billion—to these entities.
Of the total expenditure of Rs912.214 billion, the local component stood at Rs658.452 billion, while foreign funding accounted for Rs243.761 billion.
Sectoral Utilization Highlights
By June 30, ministries and divisions had utilized Rs607.321 billion—107 percent of the revised allocations of Rs566.122 billion—while corporations utilized 119 percent (Rs304.916 billion) of their revised allocations of Rs255.375 billion.
In rupee terms, the highest utilization was by provinces and special areas, which spent Rs191.065 billion against an authorization of Rs195.366 billion, achieving 98 percent of the revised allocation of Rs195.365 billion.
In percentage terms, the Railway Division posted the highest expenditure at Rs35.143 billion—189 percent of its revised allocation of Rs18.559 billion. The Ministry of Water Resources utilized 135 percent (Rs137.221 billion) against an allocation of Rs101.640 billion. The Revenue Division utilized 121 percent (Rs14.813 billion) against Rs12.214 billion.
The Finance Division released Rs7.197 billion, or 59 percent of its total allocation. The Petroleum Division utilized 108 percent (Rs612.48 billion) against an allocated amount of Rs569 million. The Finance Division reported 102 percent utilization (Rs1.915 billion) against Rs1.881 billion, while the Federal Education and Professional Training Division spent Rs27.043 billion—101 percent of the revised allocation of Rs26.810 billion.
Divisions Achieving 100% Utilization
Several divisions achieved 100 percent utilization of PSDP funds, including Commerce, Defence, Defence Production, Law and Justice, National Heritage and Culture, and Science and Technology Research. Similarly, the Higher Education Commission (HEC), Pakistan Atomic Energy Commission, and SUPARCO fully utilized their development funds.
For parliamentarian schemes, the Cabinet Division reported utilization of Rs58.170 billion—92 percent of the revised allocation of Rs63.237 billion—against 100 percent authorization.
The Inter-Provincial Coordination Division utilized 100 percent (Rs1.027 billion) of its allocated amount. SUPARCO used 100 percent of its revised allocation of Rs4.486 billion, HEC utilized 97 percent (Rs33.802 billion) of Rs34.905 billion, and the Climate Change and Environmental Coordination Division used 97 percent of its Rs2.305 billion allocation.
Corporations and Infrastructure Spending
Corporations including the National Highway Authority (NHA) and NTDC/PEPCO utilized Rs304.015 billion—119 percent—against revised allocations of Rs255.375 billion by June 30. The Planning Commission issued authorization for the entire revised allocation of Rs182.233 billion for NHA, which utilized 100 percent of funds by the end of the fiscal year. For NTDC/PEPCO, authorization covered the entire revised allocation of Rs73.142 billion, but actual utilization reached 168 percent (Rs122.555 billion) during the last fiscal year.
