Tight budget curbs development spending

The federal government allocated Rs330 billion for development projects in the first quarter (July–September) of the fiscal year 2025–26, slightly below the Rs350 billion target, officials said on Wednesday.

Planning Commission officials noted that 15% of the funds earmarked for the quarter could not be fully utilised due to flood-related losses and lower revenue collection. For the second quarter (October–December), the government has set aside Rs175 billion, bringing the total allocations for the first half of the fiscal year to 33% instead of the planned 35%.

The Planning Commission has asked all ministries and divisions to submit detailed reports on development spending by December and has directed strict compliance with the Public Finance Management Act and fund release strategy. Officials added that ministries must fully utilise first-half allocations before receiving funds for the next quarter.