Islamabad is considering a federal development budget of Rs1,126 billion for fiscal year 2026-27, marking a major increase from the revised development budget of the current year.
According to budget documents, the federal development budget for the next fiscal year has been proposed at Rs1,126 billion. The proposed size is Rs289 billion higher than the current year’s revised development budget of Rs837 billion.
The current year’s development budget had initially been set at Rs1,000 billion, but was later reduced to Rs837 billion.
Infrastructure gets highest allocation
The highest amount in the proposed development budget will be spent on infrastructure projects. According to the document, Rs730 billion has been earmarked for infrastructure-related schemes.
Of this amount, more than Rs408 billion is proposed for transport and communication projects.
The proposed budget includes Rs140 billion for water sector projects. Another Rs135 billion is expected to be spent on energy projects.
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Officials say these allocations are part of the government’s plan to strengthen key sectors linked to economic activity and public services.
Social sector spending proposed at Rs187bn
The federal government has proposed Rs187 billion for social sector development projects. This reflects an increase of Rs40 billion compared to the current allocation.
The social sector allocation includes spending on education, health and other welfare-linked development priorities.
Education budget to increase by Rs26bn
A proposal has been made to allocate Rs78.5 billion for education, including the Higher Education Commission. The education sector budget is set to increase by Rs26 billion under the proposed plan.
The allocation is aimed at supporting education-related development schemes across the country.
The proposed development budget includes Rs24.3 billion for health projects. The amount will be spent on health-sector development schemes during the new fiscal year.
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Officials say health remains part of the wider social development program in the federal budget.
The government is considering Rs45 billion for the physical planning and housing sector. Another Rs44 billion is proposed for science and information technology.
The governance sector is expected to receive Rs10 billion under the new development plan.
Parliamentarians’ schemes budget set to rise
The government has also decided to increase the budget for development schemes of members of parliament in the new fiscal year. The allocation for Sustainable Development Goals-related schemes is proposed to rise from Rs63 billion to Rs70 billion.
This increase is part of the broader proposed development spending plan.
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The proposed federal development budget includes Rs80 billion for special areas, including Azad Kashmir and Gilgit-Baltistan. The government has also decided to keep Rs66 billion for merged districts.
These allocations are aimed at supporting development needs in special regions and formerly merged tribal areas.
Economic growth target set at 4%
Key economic targets for the 2026-27 budget have also been proposed. The government has proposed setting the overall economic growth rate target at 4% for the next fiscal year.
The target for industrial development has also been set at 4%, while the agriculture sector growth target is proposed at 3.8%.
The services sector growth target for the next fiscal year has been set at 4.2%. By comparison, the pace of economic growth in the current fiscal year is estimated at 3.7%.
The current year’s GDP growth target of 4.2% could not be achieved.
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