National Economic Council likely to approve ₨1.5 trillion development programme for FY2026-27

The National Economic Council (NEC) is expected to approve a Public Sector Development Programme (PSDP) of around ₨1.5 trillion for FY2026-27 at a meeting scheduled for June 3.

The meeting, likely to be chaired by Prime Minister Shehbaz Sharif, is also expected to approve the country's annual development plan for the next fiscal year.

Ahead of the NEC session, the Annual Plan Coordination Committee (APCC) is set to finalise its recommendations after consultations with provincial governments, which have submitted development funding requirements based on their respective priorities.

Sources said the Ministry of Finance had initially proposed a PSDP ceiling of ₨1.126 trillion for FY2026-27. However, increased funding requirements from federal and provincial development projects pushed the proposed allocation to around ₨1.5 trillion.

Despite the upward revision, the proposed PSDP remains significantly below the ₨2.9 trillion sought by the Ministry of Planning.

Around ₨70 billion is expected to be earmarked for parliamentarians' Sustainable Development Goals (SDGs) schemes.

Sources said ministries and divisions have requested more than ₨4 trillion for about 286 ongoing and new development projects. However, the government intends to prioritise completion of ongoing schemes rather than initiating a large number of new projects.

Prime Minister Shehbaz Sharif has reportedly directed that development allocations be linked to performance, with sectors demonstrating stronger outcomes receiving greater support.

In this regard, the railways, information technology and power sectors are expected to receive increased allocations to support reforms and infrastructure development.

Major water storage and hydropower projects are also expected to remain a key focus of the development programme. Significant funding is likely to be allocated to the Dasu, Diamer-Bhasha and Mohmand dam projects in view of their strategic importance.