BUDGET 2026-27: CPEC 2.0 only new project in Rs3.6tr development kitty

• Govt announces Rs1tr for PSDP, Rs2.2tr for provincial programmes, and Rs450bn for SOEs
• Three key motorways, Main-Line 1 track, K-IV water scheme among mega-projects being financed
• Major allocations for AJK, GB & tribal districts

ISLAMABAD: The government on Friday announced a Rs3.675 trillion development budget for the next fiscal year, with hardly any new uplift projects.

However, the Public Sector Develop­ment Programme (PSDP) contains a list of long-overdue mega-projects, which provinces had been insisting should be financed by the Centre.

The second phase of the China-Pakistan Economic Corridor (CPEC-II) is perhaps the only new initiative listed, for which Rs1 billion was allocated.

The outlay comprises the PSDP at Rs1 trillion, the Provincial Annual Development Programmes (ADPs) at Rs2.224 trillion, and reported development spending by state-owned enterprises (SOEs) at Rs451 billion.

In his budget speech, Finance Minister Muhammad Aurangzeb said that more than 60pc of the Centre’s priorities were focused on key sections including transport, energy, IT, science, agriculture, health, and education.

More than Rs365 billion has been allocated for transport infrastructure improvement, which includes key projects such as the N-25 highway connecting Karachi and Balochistan (Rs100bn), M-6 Sukkur-Hyderabad Motorway (Rs30bn), as well as fresh financing from Asian Development Bank for the Main Line-1 project from Karachi to Rohri.

In addition, Rs2bn has been allocated for the Thar Coal Connectivity Project, and Rs93bn for transport projects in all provinces.

For the electricity sector, Rs116.2bn has been allocated, of which the flagship projects include the Dasu, Tarbela and Diamer-Bhasha dams.

Around Rs50bn has been earmarked for nine solar and wind projects, Rs8bn for renewable projects and Rs13.1bn for national grid expansion.

The finance minister said that 8m new jobs were being created in the federal priority budget, with Rs54.6bn for sustainable urban development and housing sectors, under which 150,000 climate-resistant housing units will be built.

Around Rs103.1bn has been allocated to 43 water projects, which includes Rs22bn for the K-IV water supply project in Karachi and another Rs10bn for water infrastructure.

Approximately Rs46bn has been allocated for higher education — including Rs34.9bn for the Pakistan Education and Research Network facilities, promoting digital learning and AI among Pakistani youth; and Rs3.6bn for science and technology, including universities, promoting SMEs in manufacturing, agriculture, electronics, and other sectors.

For AJK, GB and the newly-merged districts of Khyber Pakhtunkhwa, around Rs144.9bn has been allocated, which includes Rs45bn for AJK, Rs44bn for GB and Rs56bn for the former tribal districts.

In addition, Rs5bn has been specially allocated by the prime minister for AJK and Rs4bn for Gilgit-Baltistan.

Published in Dawn, June 13th, 2026