The Ministry of Finance Pakistan has instructed all ministries, divisions, departments, and autonomous bodies to return any unspent or surplus funds within the next 10 days, as part of efforts to finalize revised estimates for FY2025–26 and prepare the upcoming FY2026–27 budget.
In an official directive, principal accounting officers have been asked to surrender expected savings under all major expenditure categories by May 10. They are also required to formally report these amounts to the Finance Division’s Budget Section for timely recording in the system.
The directive covers four key spending areas, including civil government operations such as employee and non-employee expenses, as well as grants, subsidies, and development spending under the Public Sector Development Programme.
Under the Public Finance Management Act 2019, ministries are typically required to return unused funds by May 31 each year. However, the deadline has been brought forward by nearly a month following instructions from the Public Accounts Committee to strengthen fiscal discipline and allow better reallocation of resources.
The move comes amid increasing pressure on development spending. The Public Sector Development Programme has already been cut by Rs. 173 billion, roughly 20 percent of its original size, with funds redirected to the prime minister’s subsidy package aimed at easing the impact of rising fuel prices after regional geopolitical tensions.
Despite earlier allocations, overall development spending has remained slow. During the first nine months of the fiscal year, federal entities used less than half of their allocated funds for public welfare projects. According to the Ministry of Planning and Development Pakistan, total PSDP utilisation from July to March reached Rs. 415 billion, about 41.5 percent of the Rs. 1 trillion allocation—slightly higher than last year’s 36.4 percent utilisation.
An exception was seen in development schemes linked to ruling parliamentarians, where nearly 70 percent of allocated funds were spent within the same period. Significant disbursements were also made under the Sustainable Development Goals Achievement Programme, with a large portion of its revised allocation already utilized by March.
Overall, ministries had approved projects worth Rs. 589 billion by the end of March, with around Rs. 415 billion actually spent—just under half of the total allocation.
According to the current release schedule, 60 percent of annual funds should have been distributed during the first three quarters. However, lower-than-expected utilization has raised concerns about inefficiencies in spending.
The Public Accounts Committee has also directed the Finance Ministry to enforce stricter accountability, particularly for departments that fail to utilize their allocated budgets but later request additional funding.
