The government massively slashed development expenditures to reduce its rising unplanned budget deficits, however, each year the gap between the budgeted deficit and the actual has widened. As a consequence, Public Sector Development Programme (PSDP) utilisation declined considerably from 14.8 per cent of the total budget in 2008-09 to 7.6 percent in FY11.

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                                        (Rs in billion)
Year           Budget    Revised     Budget      Actual
            allocation  allocation  deficit   deficit %
              for PSDP              target %
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2008-09            549        418        4.2        5.2
2009-10            646        510        4.6        6.3
2010-11            663        462          4          6
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The above table shows the slash in budgeted PSDP allocations each year, the largest decline in last fiscal year, however the gap between the budgeted deficits and actual have widened over the past three years. In 2008-09, total federal PSDP and development expenditure outside PSDP (inclusive of BISP), stood at Rs 308 billion - 14.75 per cent of the total outlay of Rs 2087.027; in 2009-10 it declined to Rs 294 billion or 11.37 per cent of total outlay of Rs 2586 billion. In 2010-11 it stood at Rs 196 billion - 7.6% of the total expenditure of Rs 2559.367 billion.
Analysts attributed the steady decline of development expenditure from 2008-09 onward to the government's failure to control current expenditure. Current expenditure for fiscal year 2008-09 was revised upward from Rs 1493 billion to Rs 1649 billion. The government also made an upward revision in current expenditure for 2009-10 - from Rs 1699 billion to Rs 2017 billion and for 2010-11 from Rs 1997 billion to Rs 2295 billion.