ISLAMABAD: The government unveiled the Rs1 trillion Public Sector Development Programme for 2025-26, with the overarching objective of optimising the use of limited fiscal space, addressing implementation backlogs, and ensuring that new investments fully align with the country’s development agenda and long-term economic transformation goals.
The PSDP remains a cornerstone of Pakistan’s socioeconomic development strategy, and the portfolio for the next fiscal year has been aligned with the objectives of ‘Uraan Pakistan’. Priority has been attached to high-impact, near-completion projects, foreign-funded projects with adequate rupee coverage, and new initiatives of national importance. Focus has been placed on national-level projects in addition to strategic provincial projects.
Key development priorities under the PSDP will be: infrastructure and connectivity, water and energy security, education and skills, health and human development, innovation and technology, resilience and climate and regional equity.
Sector-wise allocations show transport, including National Highway Authority and others, will get Rs225bn; water resources Rs184bn; Higher Education Commission Rs61bn; health services Rs24.75bn; IT and Telecom Rs24.75bn; climate and environment Rs5.26bn; Special Areas including AJK and Gilgit-Baltistan Rs74.5bn; and Merged Districts Rs70bn.
Rs1tr PSDP will focus on core ongoing mega projects
The NEC on June 4 approved the total national development outlay at Rs4,224bn for 2025-26, the highest-ever government investment in the development sector, which also include provincial annual development programmes (Rs2,869bn) and state-owned enterprises development (Rs355bn).
In the infrastructure and connectivity sector, allocations show Quetta-Karachi Dualisation (N-25) will get over Rs100bn; Sukkur-Hyderabad motorway (Rs399bn); Eastbay Express Way Gwadar Phase-II (over Rs2bn); Thar coal rail connectivity (Rs12bn); and expansion of safe city Islamabad (Rs5bn).
Under the PSDP, Rs60bn has been allocated for the Diamer-Basha Dam, while the Dasu hydropower project will receive over Rs20bn. An allocation of Rs15bn has been made for the Mohmand Dam. For K-IV Karachi water supply project Rs10bn has been allocated.
An allocation of over Rs10bn has been made for rural electrification and solarisation. Higher Education Commission will receive Rs61bn; NAVTTC skill programme Rs4.7bn; Pakistan Education Endowment Fund Rs14bn; Cancer Hospital in Islamabad Rs5bn; and Hepatitis and diabetes control programme Rs10bn.
In the area of innovation and space science, an allocation of Rs20.65bn has been made for Pakistan manned space mission; lunar exploration rover Rs3.5bn; Quantum Valley project Rs2bn; artificial intelligence in agriculture Rs1.9bn and digital economy enhancement Rs3.58bn.
In the area of climate resilience, the government has allocated Rs106m for urban flood strategy and spatial planning; Green Pakistan programme will get Rs2.25bn; Green Skills and Innovation Rs450m; and bio-safety and SDG reporting Rs300m.
Published in Dawn, June 11th, 2025
