The federal government has proposed allocating the biggest share of its development budget for the transport and communications sector in fiscal year 2026-27, highlighting its continued focus on highways, motorways, and connectivity projects despite tight fiscal conditions.
Under the proposed Public Sector Development Programme (PSDP) of Rs. 1.126 trillion, the sector is set to receive Rs. 408.9 billion, making it the largest recipient of federal development funds.
According to planning authorities, overall infrastructure spending has been proposed at Rs. 729.9 billion, which accounts for around 65 percent of the total PSDP. Within this, transport and communications alone would receive nearly 36 percent of the entire federal development budget, ahead of water resources with Rs. 140.4 billion and energy projects with Rs. 135.6 billion.
A major portion of the proposed allocation has been earmarked for road infrastructure through the National Highway Authority (NHA), which is expected to receive Rs. 264 billion for ongoing and new schemes. These include investments in the N-25 highway, Indus Highway corridors, motorways, and regional road networks.
Among the biggest transport projects included in the proposed funding are several sections of the N-25 linking Karachi, Quetta, and Chaman, with combined planned allocations exceeding Rs. 125 billion. Other major schemes include the Hyderabad-Sukkur Motorway, Khyber Pass Economic Corridor, relocation works on the Karakoram Highway, and a number of strategic road projects in Balochistan, Khyber Pakhtunkhwa, and Gilgit-Baltistan.
While infrastructure remains the government’s top development priority, the proposed PSDP also includes Rs. 187.2 billion for the social sector. This includes Rs. 78.5 billion for education and higher education, Rs. 24.3 billion for health and nutrition, and Rs. 70 billion for the Sustainable Development Goals programme.
Special areas, including Azad Jammu and Kashmir, Gilgit-Baltistan, and the merged districts, are proposed to receive a combined allocation of more than Rs. 145 billion.
The development plan has been prepared under significant fiscal stress. Ministries and divisions had sought more than Rs. 4.1 trillion for development spending, but the Finance Division provided an indicative ceiling of just Rs. 1.126 trillion.
The Planning Commission has also warned that the federal development portfolio is carrying a throw-forward liability of more than Rs. 10 trillion, while over 90 percent of projects are facing cost escalations or delays, underlining the difficulty of funding new schemes while completing existing commitments.
