Ayesha Saba

The Public Sector Development Programme (PSDP) for 2025-26 has been framed in light of robust fund utilisation in the previous fiscal year, when Rs 1.076 trillion was spent out of the authorised ceiling of Rs1.093 trillion.

According to the latest data released by the Ministry of Planning, Development and Special Initiatives, under PSDP 2024-25 the government had earmarked Rs1.096 trillion, including Rs870 billion from domestic resources and Rs226 billion from foreign loans. The largest allocations went to the Water Resources Division (Rs194.6 billion), the Higher Education Commission (Rs61.6 billion), and the National Health Services Division (Rs20.7 billion).

In the corporate sector, the National Highway Authority (Rs161.2 billion) and the Power Division (Rs97.8 billion) received the largest shares. Expenditure trends show that certain sectors not only utilised but, in some cases, exceeded their allocations. For instance, the Water Resources Division spent Rs215.1 billion against an allocation of Rs194.6 billion, while the Power Division utilised Rs120.9 billion, well above its Rs97.8 billion allocation.

Similarly, the National Highway Authority absorbed Rs148 billion out of Rs161.2 billion, reflecting efficient implementation of infrastructure projects. By contrast, the Board of Investment and the Human Rights Division lagged behind, using only a fraction of their allocations. The authorisation-expenditure gap of less than Rs17 billion demonstrates that nearly all approved funds were utilised.

This performance will serve as a benchmark for PSDP 2025-26, where the government aims to balance fiscal discipline with development needs across provinces, special areas, and federal ministries. During July-August FY2026, PSDP expenditure rose by 23.3 percent to Rs5.3 billion compared to Rs4.3 billion in the same period last year, reflecting stronger development spending momentum.

For FY2026, the Federal PSDP includes 86 foreign-aided projects with an allocation of Rs229 billion, or 23 percent of the total PSDP. On the development side, the Ministry approved five projects through the CDWP in August 2025, while nine major projects were recommended to the Executive Committee of the National Economic Council (ECNEC).

Credit: INP-WealthPk