Inside Pakistan’s Development Budget: Transport, Energy and Water Dominate Allocations

In the federal budget 2026-27, the government has proposed to allocate Rs 729.9 billion for the infrastructure sector, significantly increasing development expenditure. This is apparently a large financial package, but the real question is whether Pakistan has the capacity to convert this investment into effective results or not.

According to the document, the largest portion has been kept for transport and communication, which consists of Rs 408.9 billion. This sector has been facing long-term delays and cost overruns, due to which experts express doubts about the performance despite this large budget.

A proposal of Rs 140.4 billion has been made for the water sector, which is extremely important for an agricultural country like Pakistan. However, the pace of water reservoir and dam projects has been slow in the past, which raises the question of whether these funds can be utilised in a timely manner or not.

Rs 135.6 billion has been allocated for the energy sector, but issues such as circular debt and transmission losses continue to weaken the energy system.

Rs 187.2 billion has been allocated for the social sector, while Rs 78.5 billion has been allocated for education. Although this increase is considered positive, it is still considered lower than the standards of developing countries in terms of overall GDP.

The allocation of only Rs 24.3 billion for the health sector is, according to experts, insufficient compared to the growing health crisis in the country. Similarly, Rs 43.9 billion has been allocated for IT and science, which is a step towards a digital economy, but more investment will be required to compete globally.

Rs 79.4 billion has been allocated for Azad Kashmir and Gilgit-Baltistan, while Rs 66.1 billion has been allocated for the merged districts, which is an attempt to maintain a balance of regional development.

The inclusion of 801 development projects in the budget indicates a wide scope; however, experts say that Pakistan’s real problem is not the number of projects but their implementation, transparency and timely completion.

According to economic experts, if the government does not improve the governance and monitoring system, this large development budget may also suffer from delays and cost overruns like past projects.