ISLAMABAD: Rushed disbursements of development funds in the last quarter of fiscal year often lead to low utilization, besides consequences on the overall economic indicators including GDP growth.
This was the consensus among economic experts while talking to Business Recorder here on Tuesday.
The government spent Rs1.05 trillion on development schemes in the last fiscal year 2024-25, and missed the revised target of Rs1.1 trillion. Of the Rs1.05 trillion, around half or nearly Rs 550 billion was spent during the last two months.
Dr Hafeez Pasha, former finance minister told Business Recorder that such huge disbursement of development funds in the last months were unlikely to achieve the desired results and have consequences on overall GDP growth. The picture regarding disbursement, utilization as well as expenditures would be more clearer once the Finance Division release fiscal consolidation data.
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Dr. Pasha further recommended the government for giving top priority to water sector and come out of roads infrastructure obsession.
Former Finance Ministry Adviser Dr Ashfaque Hassan Khan said that historically development expenditures took place in the last quarter at the rate of 40 percent, while the rest of 60 percent in the rest of the nine months of the year.
Sometimes time-lag and lack of information results in figures which are not updated, he added. He further said that utilization capacity also results in slow disbursement.
Dr. Khan said that government is on the International Monetary Fund (IMF) program and have to meet certain targets including primary surplus and budget deficit. To achieve these targets, government sometimes deliberately slow down the disbursement.
Planning Minister Ahsan Iqbal recently announced that federal development spending reached a record Rs1.05 trillion in the last fiscal year.
Copyright Business Recorder, 2025
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