KARACHI: The country’s Public Sector Development Programme (PSDP) spending in the first four months of the current fiscal year remained at only 10 percent of the annual allocation.
Total PSDP spending in July-October of FY27 amounted to Rs103.87 billion, or 10.4 percent of the Rs1 trillion allocation, according to the Ministry of Planning and Development. Actual utilisation was far lower than the Rs412.3 billion authorised by the Planning Commission.
The slow spending on public-interest projects, which is affecting living standards and economic growth, has emerged despite a 0.8 percent budget surplus posted in the first quarter of the year.
Latest data released by the Ministry of Planning and Development showed that, excluding corporations, total PSDP expenditure by about 33 ministries and divisions stood at Rs74.65 billion in the first four months, or about 11 percent of the total allocation of Rs682 billion.
The corporations, chiefly the power sector and the National Highways Authority, together spent Rs29 billion or 9.3 percent against their annual allocation of Rs313 billion.
The NHA could utilise only 5.8 percent or Rs13.3 billion in four months against its annual allocation of Rs225 billion. The power sector used Rs16 billion against its Rs98 billion allocation. The Planning Commission had authorised disbursement of Rs78.6 billion for the NHA and Rs31 billion for the power sector.
Under the mechanism announced by the Ministry of Finance for the current fiscal year, the government should release 15 percent of the budgeted allocation in the first quarter, followed by 20 percent in the second quarter, 25 percent in the third quarter and the remaining in the last quarter. This is to ensure that any shortfall in revenue collection is managed through cuts in the development budget to stay within fiscal targets set with the IMF.
The Planning Commission said it had authorised Rs303 billion for disbursement to the federal ministries in the first four months, which was more than 44 percent of their annual allocation and higher than allowed in the finance ministry’s instructions. However, only Rs75 billion or 11 percent could actually be spent on the ground.
Only eight ministries were able to cross the Rs1 billion spending threshold in 4MFY27, led by the Water Resources Division, which spent Rs18.7 billion or 18 percent of its Rs103 billion annual allocation.
This was followed by Federal Education and Professional Training with Rs6.88 billion against its Rs36 billion allocation, or 19 percent.
National Health Services, Regulations and Coordination Division spent Rs6.6 billion, achieving 41 percent of its Rs16 billion allocation. The division exceeded the utilisation target, which was even better when seen in the context of its Rs9.6 billion authorisation.
Higher Education Commission utilised Rs4.7 billion or 10 percent of its Rs46 billion annual allocation. The Ministry of Railways utilised Rs4.65 billion, around 11 percent of its Rs40.65 billion allocation.
The Ministry of Planning and Development itself used only Rs2.15 billion, or less than 10 percent, against its allocation of Rs22.6 billion. The Ministry of Information Technology used Rs1.45 billion or 7.4 percent of its Rs19.6 billion allocation.
Combined spending in provinces and special areas (Azad Kashmir and GB) amounted to Rs23.8 billion, or just 10 percent of the annual allocation of Rs233 billion and the Planning Commission’s authorisation of Rs59.8 billion for the first four months. These special areas are provided funds by the finance division under a separate seasonal pattern.
Likewise, despite the country being at risk of climate disasters, the climate change division spent only Rs259 million in four months or 10.4 percent of its Rs2.5 billion allocation.
Another critical social-sector ministry, National Food Security, utilised less than 1.5 percent (Rs65 million) of its allocation of Rs4.2 billion.
About six federal ministries could not spend even a single rupee for development in four months. They included commerce, communication, Kashmir Affairs, Gilgit-Baltistan and states and frontier regions, petroleum, privatisation, religious affairs and interfaith harmony.
