The Federal PSDP 2026-27 proposes allocating Rs252 billion for provinces and special areas, underscoring the federal government’s continued role in supporting regional development despite ongoing fiscal pressures. Budget documents show that provincial and regional projects remain heavily dependent on federal funding.
According to the budget, the total cost of provincial development projects has reached Rs812 billion. By the end of the current fiscal year, approximately Rs277 billion will have been spent on these projects, while an additional Rs470 billion will still be required to complete ongoing schemes.
Under the Federal PSDP 2026-27, Rs99.21 billion has been earmarked specifically for the four provinces. The development portfolio includes 47 ongoing projects and only eight new initiatives, indicating a focus on completing existing schemes rather than launching large numbers of new projects.
Sindh has emerged as the largest beneficiary of federal development spending among the provinces. The province is set to receive Rs50.69 billion for development projects during the next fiscal year, giving it the highest share of federal support.
Punjab has been allocated Rs4.75 billion, while Khyber Pakhtunkhwa is expected to receive Rs4 billion, the lowest allocation among the provinces. Balochistan has been allotted Rs39.75 billion, including funding for dozens of ongoing development projects across the province.
A significant portion of the Federal PSDP 2026-27 has also been dedicated to the merged districts. The federal government plans to allocate Rs66.36 billion for the region, including Rs37 billion for the ongoing 10-year development programme aimed at improving infrastructure and public services.
Additionally, more than Rs47 billion has been proposed for development projects in Azad Jammu and Kashmir and Gilgit-Baltistan. The allocations highlight the federation’s continued commitment to supporting infrastructure, public services and regional development while addressing long-term project financing needs across Pakistan.
