Development Spending Just 10.4% of Allocation in Four Months
Development spending by the federal government reached just Rs103.87 billion in the first four months of the current financial year, only 10.4 per cent of the Rs1 trillion annual allocation, despite a budget surplus.
The spending covered July to October 2026, the first four months of fiscal year 2026-27. Actual use was far lower than the Rs412.3 billion authorised by the Planning Commission, and the pattern is already affecting living standards and economic growth.
Dawn reported that the figures came from the Ministry of Planning and Development. The federal government posted a budget surplus of 0.8 per cent in the first quarter, from July to September.
Ministries spent Rs74.65bn of Rs682bn
Excluding corporations, about 33 ministries and divisions spent only Rs74.65 billion in the four months, about 11 per cent of their Rs682 billion allocation.
The corporations, chiefly the power sector and the National Highway Authority, together spent Rs29 billion, or 9.3 per cent of their Rs313 billion allocation for the year.
The Public Sector Development Programme, or PSDP, is the federal development budget, paying for roads, dams, hospitals, schools and other public works. When it moves slowly, projects stall and fewer jobs are created.
NHA spent less than 6pc of its budget
The National Highway Authority spent only Rs13.3 billion in four months, 5.8 per cent of its Rs225 billion annual allocation. The Planning Commission had authorised Rs78.6 billion for the authority.
The government has already told the NHA to back only financially viable road projects, and a bypass project in Dera Murad Jamali has stalled over funding.
The power sector used Rs16 billion, or 18 per cent of its Rs98 billion allocation. The Planning Commission had authorised Rs31 billion for the sector.
Development spending: the cash was released but not used
Under a mechanism announced by the Finance Ministry for this financial year, the government should release 15 per cent of the budgeted allocation in the first quarter, 20 per cent in the second, 25 per cent in the third and the rest in the last quarter. The staggered releases are meant to manage any shortfall in revenue collection through cuts in the development budget, so the government stays within the fiscal targets agreed with the IMF.
Under this mechanism, the Planning Commission said it had authorised Rs303 billion for disbursement to the federal ministries in the first four months. But only Rs75 billion, or 11 per cent, was actually spent on the ground.
Only eight ministries passed Rs1bn
Only eight ministries spent more than Rs1 billion in the four months. The Water Resources Division led with Rs18.7 billion, or 18 per cent of its Rs103 billion allocation.
Wapda itself is under scrutiny over lapses on the Rs316 billion Tarbela 5th Extension project. Water projects have not lacked approvals: the Economic Coordination Committee approved Rs275 billion for water projects.
Next came Federal Education and Professional Training with Rs6.88 billion, or 19 per cent of its Rs36 billion allocation. Then came the National Health Services, Regulations and Coordination Division with Rs6.6 billion, a healthy 41 per cent of its Rs16 billion allocation, against Rs9.6 billion authorised.
The Higher Education Commission used Rs4.7 billion, or 10 per cent of its Rs46 billion allocation. The Ministry of Railways used Rs4.65 billion, about 11 per cent of its Rs40.65 billion allocation. The Planning and Development Division itself used only Rs2.15 billion, less than 10 per cent of its Rs22.6 billion allocation.
The Information Technology Ministry used Rs1.45 billion, or 7.4 per cent of its Rs19.6 billion allocation.
Provinces and the ministries that spent nothing
Combined spending in the provinces and special areas, Azad Jammu and Kashmir and Gilgit-Baltistan, added up to Rs23.8 billion, just 10 per cent of the annual allocation of Rs233 billion, against a Planning Commission authorisation of Rs59.8 billion for the first four months.
The climate change division spent only Rs259 million in four months, or 10.4 per cent of its Rs2.5 billion allocation, despite the country’s high climate risk. National Food Security used less than 1.5 per cent of its allocation, Rs65 million of Rs4.2 billion.
About six federal ministries could not spend even a single rupee on development in four months: commerce, communication, Kashmir Affairs, Gilgit-Baltistan and states and frontier regions, petroleum, privatisation, and religious affairs and interfaith harmony.
The contrast is the point. Pakistan’s fiscal deficit has fallen to a 22-year low, and the Centre has spent Rs5 trillion on devolved subjects. But a surplus on paper means little if money set aside for roads, hospitals and water projects is not reaching the ground. With eight months left, ministries must spend nearly 90 per cent of the development budget to use the full allocation.
Frequently asked questions
How much development spending took place in four months?
Rs103.87 billion, or 10.4 per cent of the Rs1 trillion annual PSDP allocation, in July to October 2026.
What is the PSDP?
The Public Sector Development Programme, the federal development budget that funds roads, dams, hospitals, schools and other public works.
Which ministry spent the most?
The Water Resources Division, at Rs18.7 billion, followed by Federal Education and Professional Training at Rs6.88 billion and the National Health Services division at Rs6.6 billion.
How much did the NHA spend?
Rs13.3 billion, or 5.8 per cent of its Rs225 billion annual allocation.
Which ministries spent nothing on development?
About six federal ministries spent nothing: commerce, communication, Kashmir Affairs, Gilgit-Baltistan and states and frontier regions, petroleum, privatisation, and religious affairs and interfaith harmony.
