ISLAMABAD: While the throw-forward climbing to Rs10.82 trillion, the Annual Plan Coordination Committee (APCC) has recommended a national development outlay of Rs4.7 trillion for the next budget 2026-27.
For the controversial Sustainable Development Goals Achievement Programme (SAP) for Parliamentarians, the government has proposed allocation of Rs70 billion in the next budget. Out of the total national development outlay of Rs4.7 trillion, there will be an allocation of Rs1.126 trillion for federal development in the shape of Public Sector Development Programme, Provincial Development Programmes of Rs3.138 trillion, and federal state-owned enterprises of Rs0.45 trillion. Punjab is at the top with a proposed development allocation of Rs1.41 trillion, Sindh Rs0.816 trillion, KP Rs0.564 trillion, and Balochistan Rs0.305 trillion.
The APCC also recommended a macroeconomic framework, including envisaging a GDP growth rate of 4 percent and CPI-based inflation of 8.2 percent for the next fiscal year. The APCC was met under the chairmanship of Minister for Planning Ahsan Iqbal and representatives of four provincial governments here at P Block on Monday.
In the maiden session, Minister for Planning Ahsan Iqbal said that the federal government’s development budget had been stagnant for the last eight years, hovering around Rs1 trillion; however, the throw-forward had climbed to Rs10.8 trillion. “It’s shameful that the issuance of bonds and rollover from friendly countries are being celebrated,” the minister said publicly and added that massive gaps surfaced in the development allocation of provinces and the Centre, whereby the Centre’s development budget hovered around Rs1 trillion while provinces’ development allocation surpassed twice and stood at over Rs3 trillion.
He said that they demanded Rs4.1 trillion, including Rs1.1 trillion as rupee cover by ministries/divisions for NFY PSDP. The throw forward of over Rs10 trillion as of 1st July, 2026, which requires ten years to complete at the current size of PSDP with no new project. The PSDP size hovers around 5 percent of the total federal budget. Over 90 percent projects portfolio face cost/time over run.
The sectoral break up of federal PSDP of Rs1,126 billion indicates that major chunk of Rs729.9 billion (65 percent) resources have been earmarked for infrastructure sector projects. Within infrastructure, priority is given to Transport and Communication (T&C) Sector with 36 percent, followed by Water Resources (12.5 percent) and Energy (12 percent) PP&H with 4 percent of allocation. Social sector has proposed allocation of Rs187.2 billion (16.6 percent) comprising education/HEC (7 percent), health (2.2 percent), SDGs Achievement Programme (6.2 percent) and other social sectors (1.3 percent).
To bring the less developed areas at par with other parts of the country, an amount of Rs54.1 billion (4.8 percent) for AJ&K, GB and merged districts of KP have been proposed. The proposed allocation for S&T and IT Sector is Rs45 billion (4 percent). Funds for Governance Sector (7.1 percent), Science & IT (5.9 percent) and Production sector (0.8 percent) have been earmarked.
The APCC recommended to the National Economic Council (NEC) for approval of the National Development Outlay for FY 2026-27 at Rs4,715 billion including: a) Federal PSDP at Rs1,126 billion including foreign aid of Rs267 billion. Provincial ADPs has been proposed at Rs3,138 billion including foreign aid of Rs660 billion. d) SOEs development Programme at Rs451.316 billion.
The APCC recommended to protect the approved size of PSDP from midcourse cuts by the Finance Division, to discourage inclusion of provincial nature and new schemes, authorise Ministry of Planning, Development and Special Initiatives to approve intra/inter- sectoral adjustments of budgeted approved projects during the currency of the fiscal year for optimum utilisation of PSDP funds while remaining within approved size of PSDP 2026-27 and report to NEC.
During the APCC meeting, KP’s Adviser on Finance Muzammil Aslam stated that there were total 786 development schemes out of which 6 development schemes were part of the PSDP from the Khyber Pakhtunkhwa. He criticised the federal government for sidelining one province in the allocation of the federal PSDP. He also said that when rupee cover was not available then why the government included foreign funded projects in the PSDP lists.
The APCC also granted its nod to the macroeconomic framework for the upcoming budget. For FY 2026–27, Pakistan’s economy is targeted to grow by 4.0 percent, signaling a continued growth trajectory. The commodity-producing sectors are targeted to expand by 3.9 percent, driven by 3.8 percent growth in agriculture and 4.5 percent growth in LSM. Agricultural growth will be supported by a recovery in important crops (3.6 percent) and cotton ginning (2.5 percent), as well as robust performance in livestock (3.9 percent). The industrial sector is targeted to grow by 4.0 percent mainly due to a revival in LSM, alongside growth momentum in mining and quarrying, construction, and energy (gas and water supply). The services sector is set to grow at 4.2 percent, underpinned by stronger performance in wholesale & retail trade (4.2 percent); transport, storage, & communications (3.7 percent); and financial services (4.5 percent), as well as information & communication (7.7 percent). These targets are contingent on effective macroeconomic management and stable external conditions.
The national savings are targeted to grow by 14.3 percent of GDP in FY 2026–27, while investment is targeted to reach 15 percent of GDP, reflecting a narrowing savings-investment gap to be financed through modest external inflows. Public investment (including general government) is targeted to remain at 3.0 percent of GDP, while private investment is targeted to rise to 10.3 percent of GDP.
The CPI-based Inflation is targeted to 8.2 percent due to supportive fiscal consolidation and improved macroeconomic stability. The external sector may face pressures as easing import controls and debt repayments are likely to widen the current account deficit. However, strong remittance inflows, export recovery, and anticipated external financing are expected to help cushion these pressures and support external sustainability.
Employment is targeted to increase by 2.0 million in FY2026-27 through higher investment and improved economic growth. Public investment crowds in private investment, thereby expanding employment opportunities across all sectors. The ongoing federal and provincial employment generation programmes further strengthen labour market participation, entrepreneurship, technical skills, and job matching mechanisms. The duo efforts are expected to add 1.1 million jobs in the services sector, 0.5 million jobs in the industry, and 0.4 million jobs in the agriculture sector in FY2026-27. Thus, the increasing trend of employment creation is expected to support broad-based, inclusive, and employment-intensive economic growth, it concluded.
