ISLAMABAD – 17 June 2025: In the outgoing fiscal year, at least 39 government departments overspent their allocated budgets, with the Power and Defence Divisions topping the list, according to the federal government’s budget documents for 2025-26.
The Power Division exceeded its allocation by a staggering Rs129.5 billion, mainly due to unbudgeted spending of Rs159 billion on investments. Its operational costs more than doubled, rising from Rs215 million to Rs466 million.
The Defence Ministry overspent by over Rs61 billion, including nearly Rs59.5 billion by the Defence Services Division and Rs1.8 billion by the Defence Division. The biggest jump was seen in the “physical assets” category, which surged from Rs730 million to Rs2.5 billion.
Other notable overspenders include:
- National Health Services Division, which spent Rs51.9 billion against a budgeted Rs27.8 billion
- Federal Board of Revenue (FBR), exceeding its allocation by Rs6.57 billion
- Pakistan Post, overspending by Rs6 billion
Debt Servicing Surprises
While the government saved Rs1.77 trillion on foreign debt payments, it overshot domestic debt repayments by Rs2.6 trillion, driven by unexpectedly high disbursements to local lenders. Despite this, savings of Rs829 billion were recorded on interest payments, largely attributed to a lower policy rate. In total, debt servicing cost the exchequer Rs33.85 trillion, slightly above the allocated Rs33.84 trillion.
Underutilised Budgets Hamper Welfare Efforts
Despite rising living costs and housing shortages, some departments underutilised their funds. The Poverty Alleviation Division left Rs1.64 billion unspent, while the Naya Pakistan Housing Authority and Housing & Works Division left Rs1.1 billion and Rs1 billion unused, respectively.
The Finance Division also saved Rs216 billion in grants and subsidies, and the Economic Affairs Division did not utilise Rs7.7 billion under miscellaneous expenses.
Overall Fiscal Picture
Government savings totaled around Rs2 trillion, mainly from foreign debt and unspent funds, but were outweighed by overspending amounting to Rs2.85 trillion, including the Rs2.6 trillion extra for domestic debt.
What’s Next?
These figures, based on the AGPR data as of May 16, 2025, do not include development expenditures. Departments that overspent will require approval from the National Assembly via supplementary grants under Article 82 of the Constitution during the ongoing budget process.
Story by Zaki Abbas
