Funds favour infrastructure and political projects over education, science, and health
Faced with fiscal constraints and political pressures, the federal government has proposed a Public Sector Development Programme (PSDP) worth Rs1 trillion for fiscal year 2025–26—a sharp drop from last year’s Rs1.4 trillion original allocation.
The revised development outlay reflects a clear shift in priorities, heavily favouring infrastructure—particularly roads—over critical sectors like education, health, space technology, and atomic energy. This trend appears aimed at accommodating political allies within the ruling coalition.
Political Spending Takes the Lead
A significant portion of the PSDP has been earmarked for Sindh-specific infrastructure schemes and discretionary projects nominated by parliamentarians, many of which are politically motivated.
- Discretionary spending for parliamentarians is set to rise from Rs25 billion to Rs70 billion—a 172% increase.
- The Ministry of Defence’s development budget also sees a 114% jump, reaching Rs11.6 billion.
- Special area allocations for provinces are set to grow from Rs227 billion to Rs253 billion, with PPP-related projects receiving much of this increase.
These allocations are in violation of commitments made to the IMF, where the federal government pledged not to fund provincial nature schemes, thereby breaching the National Fiscal Pact.
Science, Education, and Health Take a Hit
Key development sectors have suffered drastic cuts to make room for politically favourable projects:
- Higher Education Commission: Slashed by 35%, down to Rs39.4 billion.
- Health Ministry: Cut by Rs10 billion to Rs14.3 billion.
- SUPARCO (Space agency): Budget reduced from Rs24.2 billion to Rs5.4 billion, a 77% drop.
- Pakistan Atomic Energy Commission: Cut by a staggering 96%, now receiving only Rs781 million.
A finance official defended the cuts, citing the self-sufficiency of some scientific institutions.
Cutbacks in Water, Power, and Railways
Infrastructure projects linked to essential services have also seen funding slashed:
- Water sector: Reduced from Rs185 billion to Rs133.5 billion.
- Railways: Allocation down by 37%, now at Rs22.5 billion.
- Power sector: Reduced from Rs105 billion to Rs90 billion.
Roads and NHA Win Big
In stark contrast, the National Highway Authority (NHA) budget has grown from Rs161 billion to Rs227 billion—a 41% increase. Major infrastructure and road development schemes include:
- Widening of N-5 (Phase-I)
- Mashkhel–Panjgur Road
- East Bay Expressway Phase-II in Gwadar
- Quetta-Karachi N-25, funded via an Rs8/litre hike in petroleum levy
- Sukkur-Hyderabad Motorway (M-6) and Dasu, Diamer Basha, and Mohmand Dam projects
Other Key Allocations
Despite constraints, the government plans to initiate or complete several national-level projects, such as:
- Flood recovery initiatives in Sindh and Balochistan
- IT Parks in Karachi and Islamabad
- Power supply to Allama Iqbal Industrial City
- Prime Minister’s National Programme for Hepatitis C and Diabetes
- Cancer Hospital in Islamabad
- The Pakistan Raises Revenue (PRR) project, funded by the World Bank
Strategic Focus and Planning Ministry’s Outlook
According to the Planning Ministry, PSDP 2025–26 has been developed under tight fiscal controls while aiming to advance national priorities. Citing insights from the IMF’s Public Investment Management Assessment (PIMA), the ministry claims it has trimmed “non-performing” and “sick” projects to focus on high-impact development aligned with the Uraan Pakistan framework.
Despite the fiscal discipline narrative, critics argue the current PSDP is more reflective of political bargaining than strategic national development, with long-term consequences for education, science, and social welfare.
