Budget 2026-27: Food security, industry sectors face major funding shortfall

The federal government is expected to allocate significantly lower funds for the food security and industrial development sectors in the upcoming fiscal year compared to their overall financial requirements

Islamabad: The federal government is expected to allocate significantly lower funds for the food security and industrial development sectors in the upcoming fiscal year compared to their overall financial requirements, according to budget documents prepared for 2026-27.

Official figures show that the combined funding demand for the National Food Security and Research Division and the Ministry of Industries and Production stands at approximately Rs117 billion. However, only Rs7.2 billion has been proposed under the Public Sector Development Programme (PSDP), highlighting a substantial gap between sectoral needs and available resources.

Out of the proposed allocation, Rs3.2 billion has been earmarked for projects related to National Food Security, while the Ministry of Industries and Production is expected to receive Rs4 billion.

Budget documents reveal that a major portion of the food security allocation—around Rs2.27 billion—will be spent on ongoing development schemes. In contrast, only Rs92.5 million has been proposed for launching new initiatives, indicating limited fiscal space for expanding agricultural development projects.

The agriculture sector’s development portfolio includes several strategic initiatives aimed at improving productivity and strengthening food security. These projects cover commercial olive cultivation, the production of certified potato seeds, promotion of camel milk production, and surveillance and monitoring programmes for livestock diseases. Despite their importance for agricultural growth and rural livelihoods, the proposed funding for these initiatives remains modest.

Meanwhile, the Ministry of Industries and Production has outlined a number of projects intended to support industrial expansion and modernization across the country. A significant allocation of Rs1.52 billion has been proposed for the establishment of an industrial park on the land of Pakistan Steel Mills, a project expected to encourage industrial investment and create employment opportunities.

The proposed budget also includes Rs50 million for the development of the Hub Special Economic Zone, which is aimed at attracting domestic and foreign investors. In addition, Rs200 million has been earmarked for the establishment and strengthening of Industrial Design and Automation Centres in Karachi, Lahore, and Sialkot to enhance technological capabilities within the manufacturing sector.

To support export-oriented industries, the government plans to allocate Rs78 million for the Sialkot Sports Goods Development Centre, while Rs257.2 million has been proposed for capacity-building programmes within the engineering industry.

Small and medium-sized enterprises (SMEs), considered the backbone of the country’s industrial sector, are also expected to receive support under the development budget. Documents indicate that Rs300 million has been proposed for SME Facilitation Centres and another Rs300 million for the establishment of 1,000 industrial units across various regions.

Additionally, the government has proposed Rs700 million for the revival and promotion of the precious stones sector, a move aimed at boosting exports and unlocking the economic potential of Pakistan’s mineral resources.