Pakistan’s Public Sector Development Program (PSDP) and Provincial Annual Development Plans (ADPs) are crucial for infrastructure and economic growth. These programs fund large-scale projects in transport, energy, education, health, and other sectors, aiming to drive socio-economic progress. However, low budget utilization rates, inefficient planning, and project delays continue to undermine their impact.
For FY 2023-24, the federal PSDP allocation stands at PKR 1,500 billion, while the total national development budget, including provincial ADPs, exceeds PKR 2.5 trillion. Despite these allocations, execution bottlenecks and governance issues remain major hurdles.
PSDP Budget FY 2023-24
| Category | Allocation (PKR Billion) | Utilization (%) |
| Infrastructure | 500 | 65 |
| Education | 200 | 58 |
| Health | 180 | 60 |
| Energy | 220 | 70 |
| Total PSDP | 1,500 | 62 |
Key Issues in PSDP Execution
- Low Budget Utilization: Only 62% of allocated PSDP funds were utilized in 2023 due to delays in fund releases and administrative inefficiencies. This is a recurring issue, as funds are often released late in the fiscal year, leading to rushed spending or project deferrals.
- Throw-Forward Liabilities: Pakistan has PKR 8 trillion worth of incomplete projects from previous PSDPs, straining future allocations. Many projects are initiated without securing full financing, causing delays and cost escalations.
- Lack of Transparency and Political Influence: Decision-making in PSDP planning is often politically driven rather than based on economic priorities. Projects are frequently included in budgets without proper feasibility studies, leading to cost overruns and inefficiencies.
Recommendations for Improvement
- Realistic Project Prioritization: The government should focus on high-impact, economically viable projects rather than politically motivated initiatives. Project selection should be data-driven and backed by feasibility studies.
- Timely Fund Releases: The introduction of quarterly budget disbursements instead of year-end lump sum releases can improve execution rates and avoid last-minute spending rushes.
- Independent Oversight Mechanism: Establishing a PSDP Monitoring Authority can enhance transparency, track project progress, and ensure timely completion. This body should publish periodic reports on project status and fund utilization.
A reformed PSDP can significantly boost job creation, economic growth, and public service delivery. However, without structural improvements in budget execution, governance, and accountability, PSDP will continue to face low efficiency, delayed outputs, and resource wastage. Strengthening institutional capacity and ensuring better financial planning can transform PSDP into a powerful tool for national development.
