EDITORIAL: Fiscal stress has a familiar casualty in Pakistan’s budgetary arithmetic: development spending. Invariably, when the government finds itself boxed in by tight revenues, rising debt servicing, or IMF-mandated targets, it is the Public Sector Development Programme (PSDP) that bears the brunt of adjustment. Roads are delayed, upgrades deferred, and critical infrastructure spending pushed into an uncertain future. This pattern is so well entrenched that even a year of strong utilisation now feels like an aberration rather than a turning point. To be sure, last year did break the mould, with nearly 96 percent of PSDP funds reportedly utilised. But that outcome must be read in the context of how the PSDP is structured and disbursed. Authorisations are heavily back-loaded, with roughly two-thirds typically released in the second half of the fiscal year. Early-year figures, therefore, rarely tell the full story. Be that as it may, persistently weak execution against authorised amounts cannot be brushed aside as a mere seasonal quirk. The latest data from the Planning Commission underscore this concern. By November 2025, Rs349 billion had been authorised out of the total Rs1,000 billion allocated for FY26, broadly in line with the phased release pattern. Actual expenditure, however, stood at just Rs91 billion. That is barely 9 percent of the full-year allocation and only about a quarter of what had already been authorised. While it may be premature to ring alarm bells solely on the basis of five months’ numbers, the painfully slow pace of utilization raises uncomfortable questions about the capacity and readiness of executing agencies. These questions matter because of where the PSDP money is meant to go. A substantial share is earmarked for the power division and water resources, sectors that are widely acknowledged to be underfunded relative to their needs. Both require sustained investment not just in new capacity, but in upgrading and maintaining existing infrastructure. Neglect on this front carries systemic risks. Weak transmission and evacuation capacity, deferred maintenance, and stalled upgrades can quickly cascade into large-scale failures. Pakistan has already experienced how localised faults in the power system can spiral into nationwide outages, with heavy economic and social costs. The irony is hard to miss. Development spending is cut or delayed in the name of fiscal prudence, yet the long-term costs of underinvestment in core infrastructure often dwarf the short-term savings. Power sector disruptions, water scarcity, and inefficient logistics all feed back into lower growth, weaker revenues, and, ultimately, even tighter fiscal space. What is required, therefore, is not just timely authorization of PSDP funds but their effective and prompt utilization. Ministries and implementing agencies must be in a position to translate approvals into on-ground progress without undue delays. Procedural bottlenecks, weak project preparation, and capacity constraints need to be addressed upfront rather than allowed to surface mid-year. Otherwise, the PSDP risks becoming a paper allocation, vulnerable to clawbacks as soon as fiscal pressures intensify. There is also a broader governance issue at play. Repeated underspending despite available authorizations suggests that the problem is not merely fiscal, but institutional. Projects are often included in the PSDP without adequate feasibility, land acquisition issues remain unresolved, and inter-agency coordination is weak. As a result, funds lapse not because they are unnecessary, but because they cannot be deployed efficiently within the budget cycle. This undermines the credibility of the development programme and weakens the case for protecting it during fiscal adjustments. Moreover, stop-start development spending distorts private sector expectations. When delays and uncertainty often caused by contractors, suppliers, and financiers are factored in, a picture of escalated costs and reduced participation shall definitely emerge. Over time, this erodes the state’s ability to execute large and complex projects, further entrenching a low-capacity equilibrium. In critical sectors like energy and water, where planning horizons span decades, such volatility is especially damaging. Unless current expenditure is brought under firmer control, the axe will continue to fall on development spending. That may balance the books in the short run, but it does so at the expense of infrastructure resilience and economic stability. The challenge for policymakers is to ensure that once development funds are authorised for execution of projects, not only are they actually spent, they are spent timely, judiciously and transparently, before yet another fiscal squeeze could make them the first target for cuts. Only then can the PSDP serve its intended purpose as a driver of long-term growth rather than a residual item in fiscal firefighting. Copyright Business Recorder, 2026