By Farooq Awan

Pakistan's ongoing federal development projects will require about three times the resources currently available under the proposed Public Sector Development Programme (PSDP) framework for FY2026-27, according to official planning documents.

A presentation prepared for the Annual Plan Coordination Committee (APCC) shows that ongoing projects will require Rs3.377 trillion in FY2026-27, while the Indicative Budget Ceiling (IBC) communicated by the Finance Division stands at Rs1.126 trillion.

The figures highlight a funding gap of more than Rs2.25 trillion between development requirements and available resources.

According to the document, the federal development portfolio currently carries a throw-forward of Rs10.818 trillion, reflecting the amount required to complete approved but unfinished projects.

The presentation indicates that the financing challenge is being compounded by rising project costs and a growing number of development commitments across multiple sectors.

Planning Ministry data show that the federal development portfolio comprises 786 ongoing projects with a combined cost of Rs15.865 trillion. Of these, 197 large projects classified as “Rocks” account for the bulk of financing requirements.

The document estimates that projects categorised as Rocks alone will require Rs2.95 trillion during FY2026-27. Meanwhile, projects classified as Pebbles and Sand are expected to require Rs349 billion and Rs78 billion, respectively.

The presentation also outlines several mandatory commitments that will consume a substantial portion of available development resources before allocations can be made to other ongoing projects.

These include funding for the N-25 highway project, allocations for Balochistan, projects in Azad Jammu and Kashmir, Gilgit-Baltistan and merged districts, coalition commitments and Sustainable Development Goals (SDGs) programmes.

In addition, the government faces significant rupee-cover obligations for foreign-funded projects. According to the presentation, the Economic Affairs Division initially sought Rs832 billion in rupee cover for FY2026-27. Following rationalisation, the requirement was reduced to Rs426 billion.

Even after the rationalisation exercise, the document indicates that available fiscal space for other development projects remains limited.

The presentation further reveals that after accommodating major commitments and rupee-cover requirements, development planners face severe constraints in allocating resources to the broader portfolio of ongoing schemes.

According to the Planning Ministry, the challenge is particularly acute because the demand generated by ongoing projects far exceeds the fiscal resources likely to be available under the proposed PSDP framework.

The figures underscore the scale of the financing challenge confronting policymakers as they prepare the federal development programme for FY2026-27 amid competing priorities and limited budgetary space.

The presentation suggests that balancing project requirements with available resources will remain one of the most significant issues facing Pakistan’s development planning process in the coming fiscal year.

Credit: INP-WealthPk