Only 9pc of development budget used in first five months of current fiscal year |
• Govt rations funds to meet IMF’s contingency measures for growing revenue shortfall
• Health, energy allocations mostly unspent; better used in foreign-funded projects
ISLAMABAD: Development spending under the federal Public Sector Development Programme (PSDP) remained subdued in the first five months of the current fiscal year, with utilisation amounting to just 9.2 per cent of the Rs1 trillion annual allocation amid fiscal rationing to meet the IMF’s contingency measures for growing revenue shortfall.
“Development spending remained modest, with Rs92 billion utilised against Rs196bn sanctioned, led mainly by infrastructure,” the Ministry of Planning and Development said in its Monthly Development Outlook (December 2025). It added that foreign-funded projects showed relatively better utilisation, with Rs12.8bn spent out of Rs25.1bn sanctioned.
At Rs92bn, the July-November utilisation was 20pc lower than the Rs115bn spent in the same period last year. The ministry attributed the slowdown to “significant reduction in expenditure by provinces, special areas and the Ministry of Railways”.
The government has given a written commitment to the IMF for contingency measures as part of the recent $1.2bn disbursement, as a five-month revenue shortfall touched Rs430bn.
According to the undertaking, if Federal Board of........