Govt PSDP spending surges to 111% in FY26
- Latest expenditure figures mark a sharp turnaround from the slow pace of development spending witnessed during most of FY26
The federal government spent more than its original Public Sector Development Programme (PSDP) allocation during fiscal year 2025-26, with development expenditure reaching over 111% of the budgeted amount, according to the Ministry/Division-wise expenditure summary.
The latest expenditure figures mark a sharp turnaround from the slow pace of development spending witnessed during most of FY26, when monthly Planning Commission updates consistently showed PSDP utilisation lagging behind the approved release schedule because of fiscal constraints.
The federal PSDP was allocated Rs820.513 billion for FY26, of which Rs820.496 billion was authorised for release. Actual expenditure, however, stood at Rs916.021 billion, exceeding the original allocation by around Rs95.5 billion, or nearly 11.6%.
Federal ministries accounted for Rs611.105 billion in development spending against an allocation of Rs565.138 billion, while corporate entities spent Rs304.916 billion, exceeding their combined allocation of Rs255.375 billion.
Among federal ministries, Provinces & Special Areas received the largest allocation of Rs195.383 billion. They utilised Rs192.559 billion, followed by the Water Resources Division, which spent Rs137.49 billion against an allocation of Rs101.64 billion, making it one of the largest overspenders during the fiscal year.
The Cabinet Division utilised Rs59.43 billion out of its allocation of Rs63.237 billion, while the Higher Education Commission (HEC) almost fully utilised its allocation, spending Rs34.897 billion against Rs34.906 billion budgeted. The Federal Education and Professional Training Division slightly exceeded its allocation, spending Rs27.043 billion against an allocation of Rs26.81 billion.
The Railways Division also recorded significantly higher spending, with expenditure rising to Rs35.143 billion compared to its allocation of Rs18.559 billion. Likewise, the Revenue Division spent Rs14.813 billion, exceeding its allocation of Rs12.214 billion.
Among corporations, the National Highway Authority (NHA) spent Rs182.361 billion, broadly in line with its allocation of Rs182.233 billion. However, the Power Division (NTDC/PEPCO) recorded expenditure of Rs122.555 billion, well above its allocation of Rs73.142 billion, accounting for the bulk of the corporations’ overspending.