Development spending halts.

ISLAMABAD -- Pakistan's federal development spending has come to a grinding halt as a mere Rs57 billion, or equal to 6% of annual budget, was spent during the first quarter of this fiscal year, which delayed the execution of some crucial projects but compensated for fiscal slippages in other areas.

Half of the total amount, or Rs23 billion, was spent on parliamentarians' schemes during the July-September quarter of fiscal year 2023-24, showed official statistics.

The planning ministry had authorised spending of Rs150 billion during the first quarter but the actual release of money was only Rs56.6 billion to be precise, according to details.

The federal government has slowed down development expenses to manage the primary budget balance agreed with the International Monetary Fund (IMF).

Sources said that initial data suggested that there were some fiscal slippages on the part of provinces, although final figures had not yet been compiled.

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However, the low releases had adverse implications for the country's foreign exchange reserves due to less-than-anticipated foreign lending for development schemes. For the current fiscal year, the government has estimated the release of Rs75 billion in foreign loans but disbursements remained at only Rs19 billion in three months. The government is facing some problems in acquiring foreign commercial loans and in borrowing via Eurobonds and it is now working on a strategy to fast-track disbursements for project financing. The low foreign loan disbursement has mostly shifted the burden of budget deficit financing on to domestic banks.

As per the Ministry of Finance's guidelines, the Public Sector Development Programme (PSDP) spending can be equal to 15% of the annual budget at Rs143 billion in the first quarter. However, the spending was Rs86 billion less than the ceiling.

Except for the Sustainable Development Goals (SDGs), an acronym used for parliamentarians' schemes, the spending did not exceed the threshold of 15% of the respective ministry's allocated budget, except for in one case.

The...