ISLAMABAD: Prime Minister Shehbaz Sharif is scheduled to chair the highest economic decision-making body — the National Economic Council (NEC) — on Wednesday (today) to approve the national development outlay of Rs4.5 trillion and the macroeconomic framework for the upcoming budget 2026-27.
The announcement of the budget was postponed twice due to difficulties in evolving consensus among major coalition partners and in convincing the provinces to freeze their financial share under the National Finance Commission (NFC) Award at the level of the outgoing fiscal year. For this purpose, the coalition government has agreed to constitute technical committees to work out details and mechanisms for securing around Rs1.2 trillion from the provinces without any rift.
The NEC, the country’s highest constitutional economic decision-making forum, will be attended by the chief ministers of all the four provinces, along with federal ministers and senior officials. Out of the total national development outlay of Rs4.5 trillion recommended by the Annual Plan Coordination Committee (APCC), Rs1.126 trillion will be allocated for federal development in the shape of Public Sector Development Programme (PSDP), Rs3.138 trillion for provincial development programmes and Rs0.45 trillion for federal state-owned enterprises.
The federal and provincial governments will present their proposed development budgets and annual development plans, while the council is also expected to approve major macroeconomic targets for the next fiscal year. The government has envisaged a GDP growth target of 4pc for the fiscal year 2026-27 after economic growth remained below expectations during the outgoing year. The council will also review public sector investment trends, progress on major infrastructure and development projects and monitoring and evaluation reports of mega schemes across the country.
Federal Minister for Planning Ahsan Iqbal is expected to give a detailed presentation on development spending, economic performance, provincial indicators and future investment priorities, before the council finalises its recommendations for the upcoming federal budget. He will inform the NEC that the total throw-forward of the PSDP has climbed to Rs10.8 trillion, requiring 10 years for completion at the current PSDP size, with no new projects added. The PSDP size currently hovers around 5pc of the total federal budget, while over 90pc of the project portfolio faces cost and time overruns.
In another development on the revenue side, the government is considering reducing additional customs duty and regulatory duty on imported cosmetics, blushes, face powders, eyeliners, mascaras, makeup kits, lip glosses, face shiners and makeup base creams, perfumes, branded apparel, footwear and personal care products. They are likely to receive duty reductions ranging from two to five per cent.
The proposed reductions are part of the government’s broader tariff rationalisation plan aimed at gradually lowering import duties and simplifying Pakistan’s tariff structure in line with economic reform commitments under the IMF programme.
The government is also considering reducing duties on imported dental cosmetic products, artificial hair and various eye makeup products as part of the broader review of customs and regulatory duties.
