By Farooq Awan

Pakistan's Public Sector Development Programme (PSDP) maintained steady implementation during FY2025-26, with development expenditure reaching Rs529.8 billion by the end of May as the government continued to prioritize infrastructure, water resources, education and regional development despite fiscal constraints.

According to the Ministry of Planning, Development and Special Initiatives' Monthly Development Update (June 2026), ministries and divisions had sanctioned Rs651 billion for development projects as of May 30, 2026, while actual expenditure recorded in the SAP system reached Rs529.8 billion, representing 64.6% of the revised PSDP allocation of Rs820 billion.

The report notes that the pace of development spending remained broadly consistent with the government's implementation strategy, reflecting continued progress in executing projects across key sectors of the economy. Compared with the previous fiscal year, when total expenditure stood at Rs544.5 billion against a PSDP size of Rs1.096 trillion, the current year's spending reflects implementation under a comparatively smaller but more sharply focused development programme.

Infrastructure projects continued to receive the largest share of development resources. Of the total revised allocation of Rs501.4 billion for infrastructure, Rs289.4 billion had been spent by the end of May, representing an implementation rate of 57.7%. Infrastructure remained the government's principal investment priority owing to its role in supporting long-term economic growth and improving national connectivity.

Within the infrastructure portfolio, the water sector recorded one of the strongest implementation performances. Against a revised allocation of Rs77.1 billion, expenditure reached Rs68.4 billion, equivalent to 88.7% of the allocation. The report attributes this to continued investment in dams, flood protection schemes and water management projects aimed at strengthening the country's water security.

Development spending in the energy sector also remained on track. The government spent Rs61.3 billion against an allocation of Rs100.2 billion, achieving 61.1% utilisation as work continued on electricity generation, transmission and renewable energy projects.

The transport and communications sector recorded expenditure of Rs119.2 billion against an allocation of Rs264.1 billion, representing 45.1% utilisation. Meanwhile, physical planning and housing projects utilised Rs40.6 billion, or 68% of their revised allocation.

Social sector spending also maintained steady momentum during the period. Overall expenditure in the sector reached Rs101.9 billion against an allocation of Rs146.6 billion, reflecting a utilisation rate of 70%. Education, including Higher Education Commission (HEC) projects, accounted for Rs43.5 billion in expenditure against an allocation of Rs52.6 billion, achieving 83% utilisation, one of the highest among major sectors.

The report shows that special areas also recorded significant implementation progress. Development spending in Azad Jammu and Kashmir (AJ&K) and Gilgit-Baltistan reached Rs62.5 billion against an allocation of Rs67.7 billion, translating into 92% utilisation. Similarly, projects in the merged districts of Khyber Pakhtunkhwa recorded 93% utilisation, with expenditure of Rs50.3 billion against an allocation of Rs54 billion, making them the best-performing categories in terms of budget execution.

In the production sector, which includes agriculture and industry, expenditure reached Rs3 billion against an allocation of Rs4.7 billion, representing 64% utilisation. Food and agriculture projects achieved 79% utilisation, while industrial projects utilised 50% of their revised allocations. Governance and science and information technology projects recorded utilisation rates of 56% and 47%, respectively.

According to the report, the government continues to prioritise efficient utilisation of development resources by directing funding towards infrastructure, human development, energy, water security and regional development projects that support sustainable economic growth. It adds that maintaining implementation momentum under the PSDP remains central to achieving national development objectives while strengthening public service delivery across the country

Credit: INP-WealthPk