Development spending stagnates amid fiscal challenges

Amid rising interest payments and disruptions caused by a change in government, Pakistan’s development expenditure has nearly come to a standstill, with just Rs22.5 billion spent in the first two months (July-August) of the fiscal year, against an annual budget allocation of Rs950bn. According to data from the ministry of planning and development, the actual expenditure on core development in two months further plunged to a mere Rs8.1bn after excluding the Rs14.4bn disbursed by the previous PDM government for its parliamentarians’ schemes, under the Sustainable Development Goals (SDGs) Achievement Programme (SAP), during the first 40 days of the fiscal year. Even the significant portion of Rs8.1bn was spent before the caretaker government took office, a senior official claimed without giving a breakdown. This amount included Rs2.8bn utilised by water sector projects, Rs1.5bn in the power sector, and an additional Rs1.4bn in the information technology and telecom sector, covering both local and international contractual obligations. The remaining Rs2.4bn was spent by about three dozen federal ministries, divisions and corporations.