Idle funds, stalled progress
Pakistan's fragile economic recovery could be severely undermined if development funds continue to be underutilised. In the fiscal year 2024-25, the government could only spend Rs905 billion under the Public Sector Development Programme (PSDP), falling short of the allocated Rs1.1 trillion – an amount already revised down from Rs1.4 trillion earmarked originally. Such persistent underspending signals administrative inefficiency and economic mismanagement.
Public development spending is a crucial driver of economic growth. It stimulates job creation, improves infrastructure, boosts investor confidence and addresses regional disparities. When the government fails to fully deploy these funds, critical projects are delayed or abandoned, leading to underdevelopment, thus stalling the economic momentum.
Alarmingly, over Rs456 billion — more than half of the total PSDP expenditure — was spent during the last two months of the fiscal year. This end-of-year rush tends to undermine both the quality and impact of development initiatives. The consequences are not just financial. The 2.7% economic growth rate projected for the year was based on assumptions that Rs1.1 trillion would be spent on development.
With actual spending falling short by nearly Rs200 billion, that projection is now at risk. This cycle of over-promising and under-delivering must end. The government needs to overhaul its budget execution strategy by ensuring early-year disbursements and removing bureaucratic hurdles. A predictable and efficient disbursal mechanism is essential not only for the completion of ongoing projects but also for attracting private sector participation.
Pakistan cannot afford to let development funds lie idle, especially in a time of economic recovery. If growth is to be revived and sustained, fiscal discipline must be matched with fiscal efficiency. It is not just about how much we allocate, but also about how effectively we spend.
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