Development outlay soars 50pc to Rs4.2trn in 2 years: minister
ISLAMABAD: Federal Minster for Planning, Development and Special Initiatives Ahsan Iqbal said that Pakistan's national development outlay has increased by 50 percent, Rs2.832 trillion to Rs4.2 trillion, in two years.
'The national development outlay has escalated due to increasing tax collection revenue. The provinces receive a 60 percent share in the collected revenue, which has led to a rise in their annual development plans.
Our five-year plan envisaged allocation of Rs4.2 trillion for the development budget in the fifth year, but this target has been achieved in the second year, describing it as encouraging,' the minister expressed these views while addressing a news conference on Thursday.
Budget FY26: APCC proposes historic Rs4.083trn outlay
He said that government could increase fiscal space by increasing export and to improve tax collection. He said that 29 percent tax collection has been increased due to making structural reforms by the Federal Board of Revenue (FBR).
The minister said that inflation has been reduced from 38 percent to four percent. He said that policy rate has been reduced from 23 percent to 11 percent. 'The government controlled economic losses due to taking better financial measures and discipline. The international departments are also recognising the better economic discipline of the government,' he said.
He said that the government wants to increase the tax-to-GDP ratio from 16 percent to 18 percent.
Highlighting the priorities,the minister said that it has been decided to put Balochistan on the path of accelerated development. He said that Rs230 billion have been earmarked in the development budget for projects in Balochistan with the aim to improve its connectivity.
He said our next thrust is on water sector and completion of water reservoirs. Referring to the weaponisation of water by India, he made it clear that India will not be allowed to stop water. He, however, he emphasised that Diamer Bhasha and Mohmand Dams will be completed on war footing. He said the government would try its level best to complete Bhasha Dam in 2030.
He said that big projects like the Diamer Bhasha and Mohmand Dams, Quetta–Karachi Highway, and new motorways will create jobs, boost agriculture, and connect our people.
Highlighting infrastructure, he announced, 'Major projects include Diamer Bhasha Dam (Rs33 billion), Mohmand Dam (Rs35 billion), Quetta–Karachi Highway (Rs100 billion), M-6 Motorway, N-55 Indus Highway, and Eastbay Expressway Phase II. In water and energy, over Rs223 billion has been allocated, including 12 hydropower projects and the 1,200 MW Sindh Solar Project. We are building a clean, self-reliant energy future.'
About the water and energy security, the minister said that Rs223 billion for clean energy and grid upgrades, with a major push on large hydropower projects and water management to reduce future crises. He said that 12 hydropower projects with cumulative planned output of over 9,000 MW. He said that 1,200 MW Sindh Solar Project and major transmission lines connecting South and the North of Pakistan.
Speaking on investor confidence, Iqbal stated, 'Investor sentiment has dramatically improved. The IMF has approved $1.4 billion under the Resilience and Sustainability Facility (RSF) —first time ever for Pakistan. We've completed the SBA programme successfully and received the second tranche under the Pakistan's Extended Fund Facility (EFF). International agencies like Fitch and Moody's have upgraded Pakistan's outlook. The World Bank signed its first ten-year $20 billion Country Partnership Framework. These are not just endorsements; they are a vote of trust in our reform momentum.'
He emphasised, 'Our fiscal deficit has come down from 5.9 per cent to 3.9 per cent. Remittances are expected to hit $38 billion this year. We have controlled Rs140 billion in losses from electricity companies, and new exploration and production investments worth $5 billion have been secured.'
He elaborated that 'ongoing federal projects now total Rs12.8 trillion, with Rs8.5 trillion in throw-forward liabilities. Low allocations increase costs every year due to delays. Our approach is to focus on projects that generate jobs, improve exports, ensure climate resilience, and build human capital.'
The minister for planning said infrastructure projects that improve regional connectivity is also our priority.
He said that said the government is focusing on equipping the youth with the latest skills. He said a programme will be implemented to train over 200,000 youth in IT skills.
He mentioned that Elimination of Hepatitis Programme has also initiated in the health sector at a cost of Rs64 billion. He said Jinnah Medical Complex and Daanish University will be established in the federal capital. He said a special economic zone one five hundred acres of land will be established in Karachi.
The minister said that Uraan Pakistan framework is being taken forward. He said our target is to achieve sustainable growth. He said the country's economic growth remained 2.7 percent in the current fiscal year and our target for the next fiscal year is 4.2 percent.
Copyright Business Recorder, 2025
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