ISLAMABAD: Due to significant revenue shortfalls and strict government control over disbursements to satisfy International Monetary Fund (IMF) requirements, the Public Sector Development Programme (PSDP) has flattened to just Rs148 billion in the first half of the current fiscal year, compared to a revised allocation of Rs1.1 trillion.
The Ministry of Planning and Development announced half-yearly (July-December 2024) data on Wednesday, showing that PSDP spending totaled approximately Rs148 billion, or roughly 10.5% of the initial Rs1.4 trillion budgeted allotment. The nation experienced a revenue shortfall of almost Rs386 billion during that time compared to the target.
Compared to the same period last year, when a caretaker government was in power and fiscal management was more stringent than under elected governments, PSDP utilization is much lower, both in absolute and percentage terms. According to the report, PSDP spending from July to December 2023 totaled Rs150 billion, or 16 percent of the Rs940 billion yearly allotment.
Against a Rs1.1 trillion budget, the government invests a pitiful Rs148 billion on PSDP.
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Merely Rs124.5 billion, or 14.7% of their Rs843 billion allotment, could be spent in six months by all 36 federal ministries, divisions, and their agencies. However, the Planning Commission asserted that only Rs124.5 billion could be spent on the ground, despite having authorized Rs286.6 billion for disbursement to the federal ministries in the first half of the year, which accounted for nearly 34% of the annual target (Rs843 billion) and in accordance with the finance ministry’s directives.
Similarly, it stated that real spending was Rs148 billion, even though the planning ministry had approved Rs376 billion against a PSDP size of Rs1.1 trillion, which was in accordance with the quarterly quota.
In 1HFY25, the National Highway Authority (NHA) and the National Transmission and Despatch Company (NTDC), the two main corporate organizations, spent a pitiful Rs23.6 billion, or roughly 9% of their combined Rs255 billion allocation. In comparison to its yearly portion of Rs161 billion, the NHA used roughly Rs19.7 billion even on an individual basis.
A pitiful Rs3.9 billion, or around 4 percent of the Rs95.5 billion yearly allotment, was used by the power industry in the first half of the year. Similarly, the Climate Change Division only spent Rs113 million in six months, or just 2 percent of its Rs5.256 billion budget, even though the nation is vulnerable to natural calamities. National Food Security, another important social sector ministry, might use roughly 2.5 percent (Rs613 million) of the Rs23.9 billion.
By spending Rs12.24 billion, or over 35% of the Rs35 billion allotted, the Railways Division may uncharacteristically surpass the general usage level.
On the other hand, the Planning Commission, which is in charge of the development program, could only spend Rs1.1 billion, or around 5% of the substantial Rs21.4 billion it had accumulated at the time of budget approval.
Together, the provinces and special regions (the combined districts of Gilgit-Baltistan, Azad Kashmir, and Khyber Pakhtunkhwa) were able to spend Rs46 billion, or around 18% of their Rs257 billion yearly budget. Only Rs32 billion, or 18.8%, could be spent by the Water Resources Division, which had the greatest PSDP allocation at Rs170 billion. Against Rs61 billion, the Higher Education Commission spent Rs9.6 billion, or 15.7%. Against Rs51 billion, the Cabinet Division spent Rs6.8 million (0.013 percent).
However, six ministries were unable to spend any money in 1HFY25: communications, housing and works, commerce, religious affairs, narcotics control, and strategic planning.
