Govt Likely to Approve Record Rs. 4.1 Trillion Development Budget Today

The federal government is set to approve a record Rs. 4.1 trillion national development budget for fiscal year 2025-26. The Annual Plan Coordination Committee (APCC) will meet today to approve the development schemes for the federal and provincial governments. It will also recommend macroeconomic targets of 4.2 percent GDP growth and 7.5 percent inflation for the next fiscal year. The total development allocation will be Rs. 300 billion or 8 percent higher than the current year’s combined federal and provincial budgets. The federal Public Sector Development Program (PSDP) has been reduced to Rs. 1 trillion, down Rs. 400 billion from the original Rs. 1.4 trillion budget for the current year. Of this, Rs. 270 billion will be financed through foreign loans. The four provinces will spend Rs. 2.8 trillion from their own resources. Provincial governments will also borrow Rs. 802 billion externally. State-owned enterprises will spend Rs. 288 billion outside the federal budget. Punjab has proposed the highest development spending at Rs. 1.19 trillion. Khyber Pakhtunkhwa plans to spend Rs. 440 billion. Sindh has proposed Rs. 887 billion while Balochistan has asked for Rs. 280 billion. The federal allocation for the water sector is proposed at just Rs. 140 billion. The power sector budget will fall by Rs. 72 billion or 41 percent to Rs. 104 billion. Also, the Diamer Basha Dam will receive Rs. 35 billion. Education and health sectors also face deep cuts. The federal education budget will drop by 27 percent to Rs. 20 billion, and the Higher Education Commission’s budget will be reduced to Rs. 45 billion.