The Public Sector Development Programme (PSDP), which is primarily funded by the federal government, has come to a near standstill under the stringent fiscal controls imposed by Pakistan’s agreement with the International Monetary Fund (IMF). In the first five months of the fiscal year, PSDP spending has reached a concerning 6.6% of its targeted 26% allocation of the annual budget.
A recent review meeting chaired by Planning Minister Ahsan Iqbal highlighted these worrying figures, revealing that only Rs92 billion has been spent on PSDP projects as of November 20, 2024, out of the revised allocation of Rs1.1 trillion. This represents just 6.6% of the total allocation, a significant shortfall from the expected 26% or Rs290 billion. Last year, a higher amount of Rs117 billion was spent in the same period despite the country facing fiscal challenges. The decline in disbursements from international lending agencies, which have contributed only Rs2.5 billion over the last five months, is one of the key reasons behind this low expenditure.
To address these concerns, the Minister of Planning has urged the Ministry of Planning to devise a comprehensive strategy to ensure the timely completion of ongoing development projects. Among these projects is a major infrastructure initiative in Balochistan, which includes road schemes and motorway construction, totaling Rs406 billion. Minister Iqbal emphasized the importance of completing these projects within three years, with particular focus on the dualization of key roads and the development of critical sections of highways.
In addition to prioritizing Balochistan, the minister stressed the need for better coordination between ministries to ensure that funds are utilized effectively, especially for projects that rely on external financial assistance. This, he believes, is crucial for meeting the targets set for PSDP expenditures and avoiding delays in project completion.
The review also covered the progress of other national infrastructure initiatives, with the Planning Minister urging prompt utilization of funds in the upcoming quarters to avoid any further delays. The government remains committed to fulfilling its developmental goals despite the challenges posed by tight fiscal measures.
