NEC to review Rs4.7 trillion development plan for FY2026–27 amid proposed PSDP revision

ISLAMABAD: Led by Prime Minister Shehbaz Sharif, the National Economic Council (NEC) at PM House with key political and economic leaders in attendance on Wednesday has concluded.

Th NEC meeting is supposed to review the distribution of development funds between the federal and provincial governments, along with economic targets and the proposed development programme for the next fiscal year.

According to official sources, the NEC is expected to approve key economic priorities and the development budget for FY2026–27, including the overall national development framework.

The proposed total national development outlay for the next fiscal year has been set at Rs4,715 billion. This includes Rs1,126 billion for the federal Public Sector Development Programme (PSDP) and Rs3,138 billion allocated for provincial development projects.

Sources said there is also a possibility of a Rs200 billion increase in the federal PSDP, which would be reviewed as part of ongoing discussions between the centre and provinces ahead of final approval.

The council’s deliberations are expected to focus on balancing fiscal constraints with infrastructure needs, as well as aligning federal and provincial development priorities before the budget is formally presented.

Among those who reached the venue were Khyber Pakhtunkhwa Chief Minister Sohail Afridi and Sindh Chief Minister Murad Ali Shah, both expected to participate in discussions on national economic planning and development priorities.

Federal Minister Rana Sanaullah also arrived at the Prime Minister’s House, along with Finance Secretary Imdadullah Bosal, as preparations for the high-level meeting got underway.

The NEC meeting is expected to review macroeconomic indicators, provincial development priorities, and fiscal coordination between the federation and the provinces.

Officials said the gathering will also focus on aligning economic targets and reviewing ongoing development projects across the country.

Budget 2026–27 in limbo

The latest postponement follows an earlier delay of the NEC session chaired by Prime Minister Shehbaz Sharif, as consultations continue between the federation and provinces over fiscal priorities and spending allocations. The government has been working to finalise a consensus on development plans and broader economic measures amid ongoing budgetary negotiations.

The NEC plays a central role in approving the annual development framework, including both federal and provincial development spending plans. For FY2026–27, the council is expected to review a combined development outlay of Rs4.715 trillion.

Officials say the forum will also consider an increase of around Rs200 billion in the federal Public Sector Development Programme (PSDP), potentially raising it from Rs1.126 trillion to nearly Rs1.326 trillion. The proposed increase reflects the government’s attempt to sustain infrastructure and development spending despite fiscal pressures and limited fiscal space.

Discussions over the budget timeline and expenditure framework have been ongoing since early June, with sources indicating repeated adjustments to scheduling as negotiations continue.

The NEC meeting will be attended by all four provincial chief ministers, provincial finance ministers, and the prime minister of Azad Jammu and Kashmir, who will collectively review and approve development priorities before the federal budget is formally presented.