CPEC 2.0 gets exclusive nod among new projects in Rs3.6tr PSDP

WEB DESK: The government on Friday announced a massive Rs3.675tri overall development budget for the upcoming fiscal year, featuring an expansive consolidation of existing schemes but containing hardly any new uplift initiatives.

Amid tight fiscal constraints, the second phase of the China-Pakistan Economic Corridor (CPEC 2.0) emerged as perhaps the only major new initiative formally introduced into the federal planning schedule, with a token initial allocation of Rs1b to kickstart its next operational phase.

Out of the total development envelope, the federal government allocated Rs1tri for the Public Sector Development Programme (PSDP).

The remainder of the national development kitty comprises Rs2.224tri earmarked for provincial Annual Development Programmes (ADPs), alongside Rs451b in development spending projected by various state-owned enterprises (SOEs).

Infrastructure and energy dominate priorities

In his budget speech to the National Assembly, Finance Minister Muhammad Aurangzeb stated that over 60pc of the federal development priorities have been targeted toward core infrastructure and social sectors.

Transport and communications secured the largest share of the federal infrastructure pie, with more than Rs365b earmarked for logistics and connectivity.

Key infrastructure projects receiving significant funding include the vital N-25 highway connecting Karachi to Balochistan, which has been allocated Rs100b, and the M-6 Sukkur-Hyderabad Motorway, which received Rs30b.

Additionally, the government has lined up fresh financing through the Asian Development Bank for the long-delayed Main Line-1 (ML-1) railway project from Karachi, alongside a Rs2b allocation for the Thar Coal Connectivity Project.

The energy sector also received substantial backing with an allocation of Rs116.2b. The government’s flagship hydel projects the Dasu, Tarbela, and Diamer-Bhasha dams will absorb a major chunk of these funds.

Meanwhile, shifting focus toward green energy, around Rs50b has been earmarked for nine solar and wind initiatives, supplemented by Rs13.1b for national power grid expansion.

Focus on regional parity and human capital

Addressing long-standing regional grievances and funding demands from the provinces, the federal budget has prioritised ongoing regional mega-projects.

For Azad Jammu and Kashmir (AJK) and Gilgit-Baltistan (GB), the government allocated Rs45b and Rs44b respectively, with the prime minister adding special disbursements of Rs5b for AJK and Rs4b for GB.

The newly-merged tribal districts of Khyber Pakhtunkhwa have been allocated Rs56 billion to support ongoing integration and development.

In the social and human capital sectors, the higher education sector received an allocation of approximately Rs46bb.

This includes Rs34.9b dedicated to upgrading the Pakistan Education and Research Network (PERN) to enhance digital learning and artificial intelligence capabilities among the youth.

Furthermore, to combat the growing challenges of climate change and urban migration, the finance minister announced that Rs54.6b has been set aside for sustainable urban development and housing, under which the government plans to facilitate the construction of 150,000 climate-resistant housing units across the country.