The Annual Plan Coordination Committee (APCC) was held today under the chairmanship of Federal Minister for Planning, Development and Special Initiatives and Deputy Chairman Planning Commission, Professor Ahsan Iqbal, to review the Public Sector Development Programme (PSDP), assess development performance for 2025-26, and finalize priorities for the Annual Plan 2026-27.
Opening the session, Minister Ahsan Iqbal delivered a candid and forward-looking assessment of Pakistan’s development challenge, emphasizing that the country is working with an extremely reduced PSDP at a time when national development demands are rising sharply. He underscored that Pakistan’s development space has been squeezed by mounting debt servicing pressures, prolonged macroeconomic stress, and worsening global headwinds.
While sharing an overview during the meeting, the Minister noted that Pakistan’s PSDP experienced its strongest momentum during the 2013-2018 period, when development spending reached its high-water mark and played a vital role in accelerating growth, connectivity, and investor confidence. He pointed out that in 2017-18, PSDP stood at 19.6% of the national budget and 2.5% of GDP, whereas by 2025-26 it had fallen to just 4.0% of the budget and 0.6% of GDP. The Committee was informed that in the previous fiscal cycle the size of PSDP 2025-26 was fixed at Rs. 1,000 billion against total demand of Rs 3200 billion. The size was further reduced to Rs. 837 billion after enforcing two cuts due to economic shocks / subsidizing energy price differentials. M/o PD&SI authorized Rs 835 billion to the respective Ministries / Divisions for July-June 2026 as per quarterly release strategy notified by the Finance Division for PSDP funds against which Rs. 529 billion has been utilized by sponsors as on 01-06-2026.
“The PSDP is not merely a budget line — it is a statement of national intent,” the Minister said, stressing that development funding is directly linked to economic growth, national productivity, and public welfare. He warned that Pakistan is still struggling to recover from the post-2018 economic shock, with the burden of debt servicing and repeated external vulnerabilities constraining the country’s ability to invest in transformative projects.
Minister Ahsan Iqbal said Pakistan must now make a strategic shift from short-term survival to long-term economic sovereignty by mobilizing domestic resources and placing exports at the center of national policy. He stressed that honourable nations do not build their future on borrowing and perpetual debt dependence, but on productive strength, competitiveness, and self-reliance.
“Honourable nations generate revenue through exports and export-related foreign direct investment,” he said. “It is neither dignified nor sustainable for a nation to rely on borrowing to finance its future. The path to self-respect and stability lies in becoming self-reliant.”
The Minister said Pakistan’s continued presence in an IMF programme is the result of deep economic damage inherited when the country was left near bankruptcy by the PTI Government. He described the IMF programme as “economic therapy” — difficult but necessary treatment for recovery.
He further stated that there is no national pride in meeting foreign exchange needs through bonds, IMF support, or rollover arrangements, arguing instead that the only durable and dignified route is to generate foreign exchange through exports and export-driven investment. Citing the examples of Korea, Malaysia, Vietnam, and China, he said that nations rise when they produce, compete, and export.
He informed the forum that his ministry’s clearest recommendation is simple and urgent: focus on exports. “Exports are the master key to economic sovereignty,” he said, calling for an all-of-government effort to put the economy on an export war footing.
During the meeting, the APCC reviewed the entire development portfolio in light of socio-economic priorities under URAAN Pakistan and the 5Es Framework, while also taking into account severe fiscal constraints. Minister Planning, Ahsan Iqbal stated that the throw-forward crossed Rs. 10,000 billion and Finance Division has indicated an IBC of Rs. 1126 billion against the demand of Rs. 4,100 billion. Furthermore, the Deputy Chairman, Planning Commission (DCPC)/ Minister for PD&SI highlighted that the federal PSDP has remained stagnant over the period. On the other hand, provincial ADPs have been substantially increased and touched Rs. 3 trillion outlay. Given the resource constraints, there is no room for inclusion of new projects in PSDP 2026-27. The Chair classified the projects included in PSDP 2026-27 mentioned that 197 projects costing Rs. 14,687 billion have been approved by ECNEC, 335 projects costing Rs. 1,045 billion have been approved by CDWP and 254 projects costing Rs. 133 billion have been approved by DDWP. The Chair further highlighted that priority of the federal PSDP in on funding of Core Infrastructure projects which are approved by ECNEC followed by CDWP which constitute over 95% of the total portfolio.
The APCC recommended a National Development Outlay of Rs. 4,715 billion for 2026-27 for consideration by the National Economic Council (NEC). This includes Federal PSDP of Rs. 1,126 billion, Provincial ADPs of Rs. 3,138 billion, and SOEs’ investment of Rs. 451 billion. Given the limited fiscal space, the Committee decided that more than 98% of available resources will be directed toward ongoing projects, with priority accorded to high-impact and near-completion schemes, especially in water, energy, transport, and other core infrastructure sectors.
Ministries/Divisions demanded Rs. 4100 billion for PSDP 2026-27 including 1126 billion for foreign aided projects. The demand for ongoing projects is Rs 3300 billion including Rs. 1800 billion for mega/core projects like ML-I, Diamer Bhash, Dasu, Mohamund Dams, Thar Connectivity and others. The Economic Affairs Division (EAD) indicated demand for rupee cover of Rs 426 billion based on disbursement estimates for the next Fiscal Year indicated by the sponsors.
The APCC showed concern that the IBC of Rs 1,126 billion issued by Finance Division for PSDP 2026-27, is 27% of the funds demanded by the Ministries, 38% of rationalized demand worked out by the M/o PD&SI and around 11% of throw-forward of ongoing projects. The ongoing portfolio requires ten years to complete due to inadequate size of PSDP against huge throw-forward.
As per guidelines approved by NEC, the priority in funding is given to (a) strategic and core on-going projects, with particular focus on water resources, transport, communications, and energy sectors (b) foreign aided projects with required rupee cover to ensure smooth execution of the foreign aided projects, uninterrupted inflow of the foreign exchange and to honor international commitments and (c) projects with 80% plus expenditure in all sectors with the aim of completing them during FY 2026-27 so as to provide financial and economic benefits to economy from critical projects. Furthermore, allocations for AJ&K, GB and Newly Merged Districts of KP have been protected and token allocation has been avoided along with discouraging new and provincial nature projects except a few which are aligned with national priorities. Besides, less developed area particularly Balochistan, Gwadar, AJ&K, GB have been prioritized. Under the PSDP 2026-27, more than 98% resources have been earmarked to on-going projects.
The Minister reiterated that Pakistan now needs a national development mission anchored in stability, continuity, reform, and export growth. “This is the time to move from stabilisation to take-off, from recovery to reform, and from resilience to renewal,” he said.
The APCC concluded with a renewed resolve to align scarce public resources with projects that can accelerate growth, strengthen resilience, and support Pakistan’s transition toward a more self-reliant, export-led economy.
