The federal government announced a Rs 3.675 trillion development budget for the 2026-27 fiscal year. However, the package introduced very few new development projects. Officials identified CPEC Phase II as the only major new initiative. The government allocated Rs 1 billion for the project’s initial implementation.
Transport and Energy Receive Major Funding
The development package includes a Rs 1 trillion Public Sector Development Programme. Meanwhile, provincial Annual Development Programmes received Rs 2.224 trillion in funding. State-owned enterprises will spend an additional Rs 451 billion on development projects. Finance Minister Muhammad Aurangzeb said the government prioritized transport, energy, information technology, agriculture, health, science, and education.
The government allocated more than Rs 365 billion for transport infrastructure projects. Key allocations include Rs 100 billion for the N-25 Highway connecting Karachi and Balochistan. Additionally, the M-6 Sukkur-Hyderabad Motorway received Rs 30 billion.
The government also secured fresh Asian Development Bank financing for the Main Line-1 railway project. Furthermore, authorities allocated Rs 2 billion for the Thar Coal Connectivity Project. Another Rs 93 billion will support transport schemes across all provinces.
Education, Water and Regional Projects Prioritised
The government earmarked Rs 116.2 billion for electricity projects, including the Dasu, Tarbela, and Diamer-Bhasha dams. Moreover, renewable energy projects received Rs 58 billion in combined funding. Authorities also allocated Rs 103.1 billion for 43 water projects nationwide. The K-IV water supply project in Karachi received Rs 22 billion.
Meanwhile, higher education secured Rs 46 billion, including digital learning and artificial intelligence initiatives. The government also allocated Rs 144.9 billion for Azad Jammu and Kashmir, Gilgit-Baltistan, and merged tribal districts. Additionally, the prime minister approved special grants for both AJK and Gilgit-Baltistan. Officials expect the budget to support infrastructure, education, and economic growth nationwide.
