Pakistan's Development Spending Falls Short of Budgeted Target

Strategic Insights -

Pakistan's government spent Rs905 billion on development schemes in the last fiscal year, which is lower than the allocated and revised budget of Rs1.1 trillion. The downward revision in development spending has raised concerns about the country's economic growth rate, which was previously set at 2.7%. The federal government's Public Sector Development Programme (PSDP) expenditure for the fiscal year 2024-25 ended on Monday, provisional figures show.

Key Takeaways:

  • Pakistan's government spent Rs905 billion on development schemes in the last fiscal year, falling short of the allocated and revised budget of Rs1.1 trillion.
  • The government had initially announced a 2.7% economic growth rate, which was based on the assumption that the downward-revised Rs1.1 trillion PSDP would be fully spent.
  • However, the actual spending remained lower than the revised budget, leading to concerns about the country's economic growth rate.
  • The planning minister, Ahsan Iqbal, attributed the slow spending to delays in approvals by the Accountant General Pakistan Revenues (AGPR).
  • The Ministry of Finance had instructed the AGPR to slow down releases during the last days of June to meet International Monetary Fund (IMF)-related budget targets.
  • The government spent a significant portion of the budget in the last two months, with Rs456 billion being spent in May-June alone.
  • The parliamentarians' schemes, branded as Sustainable Development Goals (SDGs) initiatives, received more than the downward-revised budget, with Rs60.5 billion spent in the last fiscal year.
  • Provincial projects, funded by the federal government, received Rs69.5 billion, despite being against the commitments given to the IMF and the National Fiscal Pact.
  • Development spending on schemes being executed in the erstwhile Federally Administered Tribal Areas (FATA) received close to the original allocation, with Rs64 billion being spent.

Statistics:

  • Pakistan's government spent Rs905 billion on development schemes in the last fiscal year, lower than the allocated and revised budget of Rs1.1 trillion.
  • Rs456 billion was spent in the last two months (May-June) on development schemes.
  • Rs308 billion was spent on development schemes in June alone.
  • Development spending on parliamentarians' schemes (branded as SDG initiatives) reached Rs60.5 billion, higher than the downward-revised budget.
  • Provincial projects received Rs69.5 billion in funding, despite being against IMF and National Fiscal Pact commitments.
  • Development spending on schemes in FATA received close to the original allocation of Rs64 billion.

Sources:

  • The Express Tribune
  • Pakistan Bureau of Statistics (PBS)
  • Ministry of Finance
  • Accountant General Pakistan Revenues (AGPR)
  • International Monetary Fund (IMF)
  • National Fiscal Pact
  • Planning Ministry Report