Qudsia Bano

The federal government has authorised development expenditures amounting to Rs330.43 billion during the first four months of the current fiscal year, equivalent to 33 percent of the total Public Sector Development Programme (PSDP) allocation for FY2025-26. According to the Monthly Development Update for November 2025, the Ministry of Planning, Development and Special Initiatives also achieved savings of Rs2.2 billion through its cost rationalisation exercise, reflecting efforts to strengthen fiscal discipline and improve the efficiency of public investment.

The report notes that the PSDP for FY2025-26 stands at Rs1,000 billion, comprising both local and foreign components. Up to the end of October 2025, the Ministry authorised Rs330.43 billion for ministries, divisions and implementing agencies to execute priority development projects nationwide. A year-on-year comparison shows that between July and October 2024-25, PSDP spending amounted to Rs81.9 billion, while expenditure for the same period this year reached Rs76.0 billion.

Sector-wise analysis shows that infrastructure remains the largest segment of the PSDP, accounting for 63 percent of total allocations. The infrastructure sector received Rs626.77 billion, of which Rs46.12 billion had been utilised by the end of October. Within this category, transport and communication received Rs333.48 billion and spent Rs25.93 billion during the four-month period. Of the Rs122.65 billion allocated to energy projects, only Rs2.54 billion has been utilised, while the physical planning and housing sector spent Rs4.69 billion out of its Rs72.73 billion allocation.

Water sector expenditures reached Rs12.95 billion against a total allocation of Rs97.90 billion. The social sector was allocated Rs169.31 billion, representing 17 percent of the PSDP. Education, including funding for the Higher Education Commission, received Rs60.75 billion and spent Rs8.97 billion. The health and nutrition sector utilised Rs0.14 billion from its Rs16.84 billion allocation, while the “others” subcategory spent Rs1.51 billion from its Rs21.71 billion allocation.

In the governance sector, Rs11.17 billion was allocated with expenditures of Rs0.65 billion by the end of October. Science and IT projects received Rs37.59 billion (4 percent of the PSDP) and utilised Rs1.69 billion. The industries and production sector received Rs7.93 billion—Rs5.07 billion for food and agriculture and Rs2.86 billion for industry—with expenditures of Rs0.48 billion and Rs0.15 billion respectively. Special areas, including Azad Jammu and Kashmir (AJ&K) and Gilgit-Baltistan (GB), received allocations of Rs81.80 billion, or 8 percent of the PSDP.

Development activities in the merged districts of Khyber Pakhtunkhwa were allocated Rs65.44 billion. The report highlights continued implementation of the Accelerated Implementation Program (AIP) for the merged districts, supported by a Joint Steering Committee chaired by the KP chief minister with federal representation. The Monthly Development Update also outlines the role of foreign-funded projects within the PSDP. There are 86 such projects with a combined foreign cost of Rs4.2 trillion.

Fifteen projects are entirely financed by foreign partners, while 71 operate on a cost-sharing basis. Between July and October 2025, ministries and agencies sanctioned Rs25.1 billion under rupee cover for foreign-funded projects, with actual expenditures of Rs6.3 billion. The report details release and expenditure shares among major development partners. Releases included Rs4.03 billion from the World Bank, Rs4.12 billion from the Asian Development Bank, Rs1.75 billion from Korea, Rs15.02 billion from the United States and Rs0.014 billion from China.

Expenditures amounted to Rs4.65 billion on World Bank–supported projects, Rs0.66 billion on US-funded initiatives, Rs0.32 billion on Korea-supported schemes, Rs0.07 billion on China-funded ones and Rs0.007 billion on ADB-backed projects. The Ministry of Planning also reported progress in monitoring and project rationalisation. A total of 22 projects were monitored in October against a target of 19, while seven were evaluated against a target of eight.

Through detailed scrutiny of ongoing schemes between July and September 2025, the Ministry reduced project costs from Rs1,424.9 billion to Rs1,422.7 billion, generating savings of Rs2.2 billion by removing non-essential and redundant components. The report states that the government remains committed to ensuring that development spending aligns with national priorities and delivers high-impact outcomes across key sectors.

Credit: INP-WealthPk