Pakistan's development budget stuck at PKR 1T for 8 years, laments minister

Pakistan's federal development budget has remained largely stagnant for the past eight years as a growing share of government resources is being consumed by debt servicing, Planning Minister Ahsan Iqbal said on Monday.

He was speaking at a meeting of the Annual Plan Coordination Committee (APCC) ahead of the FY2026-27 budget.

Why has Pakistan's federal development budget stayed flat?

Pakistan's federal development budget has remained at around PKR 1 trillion for the past eight years, effectively unchanged from its 2018 level.

Planning Minister Ahsan Iqbal said debt repayments are now consuming a major portion of budgetary resources. The country needs about PKR 10 trillion to complete ongoing development projects.

The APCC reviewed priorities and resource allocations ahead of the federal budget for FY2026-27. Its recommendations will be forwarded to the National Economic Council for final approval.

How does provincial development spending compare?

Provincial development spending has expanded significantly over the same period. Provincial development budgets grew from around PKR 1 trillion to PKR 3 trillion over the last eight years, Iqbal said.

Iqbal described the widening gap between federal and provincial development allocations as a major challenge. He said it was becoming increasingly difficult to finance less important federal projects.

How much will Pakistan spend on Balochistan?

The federal government plans to prioritize Balochistan in the upcoming budget. Development projects worth PKR 125 billion will be allocated for the province in the next fiscal year.

Of this amount, PKR 25 billion is proposed for upgrading and constructing the N-25 highway. The highway is a major transportation corridor linking several districts of the province.

The government also plans to focus on development schemes worth PKR 87 billion associated with its coalition partners. The schemes are part of efforts to support regional development priorities.

What will AJK and Gilgit-Baltistan receive?

The federal government plans to allocate PKR 153 billion for Azad Jammu and Kashmir and Gilgit-Baltistan in the upcoming budget. Both regions currently receive funding from the federation.

Iqbal argued that both regions should receive a share under the National Finance Commission (NFC) framework. Their funding is currently provided by the federal government.

He said allocations for AJK and Gilgit-Baltistan would be drawn from the federation's 40% portion of the divisible pool under NFC.

When will Pakistan announce the FY27 budget?

The APCC meeting reviewed development priorities and resource allocations ahead of the FY2026-27 federal budget. The budget is expected to be presented on June 5.

The committee's recommendations will be forwarded to the National Economic Council for final approval.