In First Nine Months of Fiscal Year 2023, federal development spending remained below half of the budget, indicating difficulties in both financing and implementation due to ongoing economic and political crises.
According to the Ministry of Finance’s latest fiscal data, spending on the federal Public Sector Development Program (PSDP) from July-22 to March-23 of this fiscal year amounted to Rs329 billion, compared to the original budget of Rs727 billion for FY23. However, there has been increased activity in the third quarter, which has boosted the overall spending for the first nine months.
Compared to the previous year, the PSDP spending for the first nine months of FY23 has decreased by 27 percent, while total expenditures (including high “current expenditures”) have grown by 17 percent, reaching nearly Rs7 trillion. The proportion of development spending has declined further this fiscal year due to increased debt servicing and disappointing tax revenue growth. In the first nine months of FY23, the PSDP spending accounted for only 5 percent of total federal expenditures, down from 8 percent in the previous fiscal year and an average of 9 percent over the past five and ten years.
Furthermore, the analysis reveals that the current fiscal year’s development spending is at a multi-year low. The nominal figure for the first nine months of FY23, under Prime Minister Shehbaz Sharif’s administration, is almost identical to the spending in FY17 when his brother, Nawaz Sharif, was in power (although Nawaz Sharif was on the verge of being ousted by the judiciary at that time). Despite expectations of increased and noticeable development spending under Shehbaz Sharif, macroeconomic challenges have disrupted his development plans.
Latest posts by News Desk (see all)
- FBR asked to enhance efforts for Broadening Tax Net - May 27, 2023
- National Savings Rate for June-2023 - May 27, 2023
- Islamabad to get a new “Luxury Resort” - May 27, 2023