Public Sector Development Programme

The Balochistan government withheld budget documents from journalists and public for the first time as lawmakers debated the 2026-27 budget. Opposition leaders criticized the Rs206bn development package as inadequate, while ministers defended the tax-free plan. The budget faced accusations of ignoring the province’s needs and failing to address persistent instability.

PPP Chairman Bilawal Bhutto-Zardari warned of a National Assembly boycott unless the party's budget-related demands are addressed, citing discrepancies between pre-budget consultations and the final budget document. The PPP raised concerns about provinces meeting IMF-linked revenue targets and urged the government to broaden the tax base instead of increasing taxes on existing classes. Another round of talks between PPP leaders and Deputy Prime Minister Ishaq Dar is expected.

The government utilised only 52.4% of the Rs1.01 trillion Public Sector Development Programme (PSDP) budget in the first 11 months of FY26, with allocations reduced by Rs173 billion to fund fuel subsidies amid rising oil prices. Special regions like Azad Kashmir and Gilgit-Baltistan spent just 62% (Rs153.86 billion) of their allocation due to further cuts.

The budget for FY2026-27 is likely to be announced on June 12, with parliamentary sessions scheduled for June 10. Federal and provincial governments remain deadlocked over freezing provincial shares in the federal divisible pool, while the PML-N and PPP have reached a consensus on the budget framework.

A PPP delegation led by Bilawal Bhutto-Zardari discussed tax-related concerns with Ishaq Dar during a pre-budget meeting, emphasizing the need for a broader tax base to avoid burdening the same classes. The PPP opposed new taxes and sought ways for provinces to meet IMF-mandated revenue targets, with the budget set for announcement on June 10.

Pakistan's 2026-27 budget proposes Rs179 billion for water and hydropower projects, far below the estimated Rs500 billion needed to avoid delays in major dams like Diamer-Bhasha and Dasu. Officials warn insufficient funding risks progress on critical infrastructure, which is vital for addressing water scarcity, climate change, and energy costs.