Capital Spending Lags as Development Budget Utilisation Remains Below 11%

Capital expenditure has moved at a sluggish pace in the first half of the current Fiscal Year, with less than 11 percent of the allocated development budget being spent so far. Ministry of Finance data show that only Rs 43.6 billion has been utilised out of more than Rs 400 billion earmarked for capital projects by January 10, reflecting just 10.69 percent progress.

The performance is weaker compared to the same period last fiscal year, when capital spending had reached Rs 53.58 billion, or 15.21 percent of the allocation. Officials attribute the slowdown to disruptions caused by the recent Gen Z protests, which affected administrative operations for over a month, along with delays linked to the termination and review of underperforming contracts.

While recurrent expenditure has remained largely on track, authorities say capital spending is expected to pick up in the coming months as implementation hurdles ease. Representatives from the construction sector, however, note that poor project selection and execution challenges have also contributed to delays, underscoring structural issues in development planning and implementation.