Pakistan seeks PKR 200B in fresh revenue to fund bigger development budget

Pakistan is exploring ways to generate an additional PKR 200 billion in revenue to fund a larger development budget for FY2026-27, government sources said.

The country's National Economic Council (NEC) is scheduled to meet on June 3 to consider a revised plan that lifts federal development spending by the same amount.

How is Pakistan trying to raise an extra PKR 200 billion?

The additional PKR 200 billion would support a revised federal Public Sector Development Programme (PSDP) of PKR 1.326 trillion, up from the previously proposed PKR 1.126 trillion.

However, the Ministry of Finance and the Federal Board of Revenue (FBR) have declined to lift the annual tax target to accommodate the increase.

They have declined to raise the FY27 tax collection target from PKR 15.26 trillion to PKR 15.46 trillion, citing revenue constraints.

What will the National Economic Council decide on June 3?

The NEC is Pakistan's highest economic decision-making forum. It is set to consider a proposed national development outlay of PKR 4.46 trillion for FY2026-27.

The meeting will be chaired by the prime minister and attended by the chief ministers of all four provinces, and provincial finance ministers. The prime minister of Azad Jammu and Kashmir will also attend.

The council will review development priorities and approve key economic and fiscal targets ahead of the federal budget for FY2026-27.

How much will Pakistan spend on development in FY27?

The proposed national development outlay totals PKR 4.46 trillion. It includes PKR 3.14 trillion for the four provinces and PKR 1.33 trillion for the federal government.

The federal allocation of PKR 1.33 trillion is PKR 200 billion higher than the figure previously proposed by the Ministry of Finance. The increase reflects the government's effort to accelerate development spending and support economic growth.

How will provinces split the development budget?

Punjab is expected to receive the largest provincial allocation at PKR 1.45 trillion. Sindh would follow with PKR 816 billion.

Khyber Pakhtunkhwa is set to receive PKR 564 billion, while Balochistan would get PKR 308 billion. The four provinces together account for about 70% of the proposed national development outlay.

When will Pakistan announce the FY27 budget?

The NEC will approve the macroeconomic framework and development plan before the budget is presented on June 5.

The June 3 meeting forms the final step in the planning process. Officials are exploring alternative fiscal and financial measures to create space for the higher development allocation while maintaining overall budgetary stability.