Cabinet approves Federal Budget for FY2026-27

June 12, 2026 (MLN): The federal cabinet has approved the budget proposals for fiscal year 2026-27, which include a total national development outlay of Rs3.67trillion under the Public Sector Development Programme (PSDP), anchored around the government's URAAN Pakistan vision and its 5Es strategy.

The programme, approved by the National Economic Council (NEC) and prepared by the Planning Commission, sets the Federal PSDP at Rs1.0tr, comprising Rs255bn in rupee cover and Rs745bn in local financing.

Provincial Annual Development Programs (ADPs) account for Rs2,224bn, while State-Owned Enterprises (SOEs) contribute Rs451bn.

Infrastructure claims the largest share, with the National Highway Authority (NHA) receiving Rs224.5bn. Major projects include the dualization of the Karachi-Quetta-Chaman corridor and the Hyderabad-Sukkur six-lane Motorway.

The Water Resources Division has been allocated Rs103bn, with flagship projects including Diamer Basha Dam and Mohmand Dam.

The Railways Division receives Rs40.7bn, headlined by the ML-1 Upgradation project under CPEC with a total cost of Rs1.923tr. The Power Division has been allocated Rs88bn, covering grid expansion and the Dasu Hydropower Project.

On the social side, the Higher Education Commission (HEC) receives its highest-ever allocation of Rs46bn, while a dedicated PM Youth Program gets Rs18.1bn.

The IT Division receives Rs19.6bn, including Rs13bn for a National AI Ecosystem Development Program.

The government has also launched CPEC 2.0 with an initial allocation of Rs1bn, signaling a renewed push under the second phase of the China-Pakistan Economic Corridor.

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