Qudsia Bano

The federal ministries and divisions utilized around 54 percent of their allocations under the Public Sector Development Programme (PSDP) during the first 11 months of the last fiscal year, raising serious concerns about the pace and effectiveness of public investment, reports WealthPK.

According to the data released by the Ministry of Planning, out of the total allocation of Rs1.096 trillion for PSDP 2024-25, Rs1.036 trillion was authorized for release. However, the actual spending stood at just Rs596.6 billion by the end of May 2025. This underutilization has prompted experts to call for urgent action to improve project execution and public sector efficiency.

Analysts pointed out that the low utilization rate could undermine economic growth, as development spending plays a critical role in generating employment, supporting infrastructure, and stimulating private sector activity. Water resource development and parliamentarian schemes were among the sectors that received full authorizations - Rs199.6 billion and Rs48.9 billion, respectively, but the actual spending remained significantly lower in many cases.

The Water Resources Division, for instance, utilized only 41.6 percent of its funds. Commenting on the trend, Imran Khalid, Manager of Finance at Arif Habib Limited, said while fiscal constraints were real, delayed disbursement and weak implementation capacity were also key issues. “Development spending should follow a calendar that ensures funds are released and utilized consistently.

If departments wait until the final quarter to act, the quality of spending suffers and infrastructure gaps persist,” he explained. Dr. Faiza Rehman, Assistant Professor of Economics at Quaid-i-Azam University, noted that the repeated pattern of underutilization indicated deeper structural issues. “It's not just about lack of funds.

Planning, procurement delays, and limited capacity to execute large-scale projects remain major hurdles. The government needs to invest in strengthening project management skills and ensuring timely coordination between the centre and provinces,” she said. She added that without improved spending efficiency, even increased budgetary allocations in the coming years would fail to deliver their intended impact on growth and social development.

As the Fiscal Year 2024-25 has come to a close, calls for reforming the development expenditure process have grown louder. Stakeholders emphasize timely disbursements, better monitoring of project progress, and greater accountability to ensure that the allocated resources translate into meaningful development outcomes.

Credit: INP-WealthPk